Price per gross square foot, indemnification, T1 lines … . Is there anything in a convention center deal that isn't negotiable?
What about, say, helicopters?
“I started my career with Helicopter Association International,” says Stephen Schuldenfrei, president of the Exposition Operations Society in Framingham, Mass. “We had some unusual requirements because we were landing helicopters in the back of convention centers and then taking them into the buildings. The fire marshals never wanted it to happen. … It took a lot of meetings. We compromised. We generally paid for having a firetruck and a crew of four on hand; we also agreed to restrict the number of helicopters in the building.”
OK — helicopters are negotiable. What about price per square foot? Most event planners agree that square-footage fees are rarely negotiable with publicly owned convention centers, but private centers do have the ability to dicker. Yet even managers of government-owned facilities have some wiggle room — if you ask for the right concessions. Prices may be set in stone for exhibit floor space, but flexibility over extra meeting rooms, move-in/move-out time, or even helicopter landing rights may keep them competitive.
Try this bit of attitude adjustment: What's negotiable is what's important to you. For example, is exclusivity your hot button? If so, Pat Philips, director of corporateoperations and best corporate practices for VNU Expositions in Chantilly, Va., suggests negotiating a restrictive clause in the : “Don't allow anyone competing from your industry into the same convention center within 30 days before or after your event.”
“The undercurrent issue is [to] know your group and what's important to them,” Schuldenfrei says. “As with any, you will have giveaways, the things you have to have, and the things that are not important. Some buildings are pretty inflexible, and you have to be willing to walk away.”
Creativity counts, too.
“If we have a show that requires three move-in days and two move-out dates,” says Mike Webster, vice president of exposition operations for Advanstar in Santa Ana, Calif., “we can negotiate with the convention center and show on either side of our dates to move in a little earlier or faster. Or the convention center might offer us straight-time labor even though we're moving in overnight.”
Leverage, of course, makes many things negotiable. That means that the bigger you are, the more events and dates you book, the better the chances of non-negotiable items suddenly becoming negotiable.
VNU's Philips books a lot of different events, many of which wind up in the same convention centers over and over again. While this creates leverage, she still needs to be vigilant. “Sometime convention center managers think they can price one of our shows at $1.55 net per square foot and another one at $1.35,” Philips says. She personally reviews all facilityat VNU for two reasons. First is to leverage buying power with repeat convention center suppliers. She also insists on standardized language to protect VNU's interests. “There's a lot of research to be done in reviewing a facilities contract. Much of it is in standard language that a facility manager doesn't realize won't apply unless you point it out. … We try to establish a template for each facility so we don't have to reinvent the wheel every time we go back to the same facility with a different show,” Philips says.
When Do You Need My Business?
If your event's size or frequency doesn't muster any clout, date flexibility almost always gets attention. “The February through May and September through November time slots are the ones most in demand,” Nathan says. “Negotiations for those times are more difficult. But if you wanted to host a show in New York City between Christmas and New Year's Eve, they would probably kiss your rear end in Times Square.”
Or consider a Florida destination. The value of the event diminishes to the convention center if you want space in, say, Fort Lauderdale in February. Midwinter, the chances are good that the convention center and surrounding hotels are full. In July, chances are equally good that they're not. Since the value of your meeting is relative, ask the venue, “When do you need my business?” That's when the real negotiations begin.
“The planner always has the advantage,” says Steven Hacker, president of the International Association for Exhibition Management in Dallas. “The information you need to negotiate is always available; it's almost always public. I don't need to ask the convention center director who is in town during a week I'm interested in. I can look online, check a newspaper. There are all kinds of ways I can do research. I can say, ‘I know the building is empty from July 15 to 18, and I can fill it. Are you interested in talking?’”
Rate Ain't Everything
Negotiations don't need to — and shouldn't — exclusively focus on the bottom line. “Rate is only one part of the package,” Hacker says. “You may get a miraculous rate, but you won't get service or cooperation. You need to know what the other party needs to make it work. That's the most common mistake of both parties — they focus on what I need, to the exclusion of the other party.” Hacker suggests an approach that challenges a negotiating partner to offer his best. He says to a facility: “I would like to create an event that leaves an impression on everyone in attendance. You tell me how you can make my event spectacular.” Approaching negotiations that way, he says, rather than thinking “How much can I squeeze out of you?” is more likely to get a center to step up to the plate.
Schuldenfrei agrees. “If you get something, you're going to give something. Most of my negotiating is friendly; I am not adversarial at all. I prefer to go in and look at, ‘What am I going to win? What do they need to win?’ so everybody will be happy.”
It's a lesson that Kelly Cook Marcavage, principle of Casey Enterprises in Collegeville, Pa., learned while serving as vice president of meetings and planning for A/E/C Systems International in Exton, Pa. Two cities and their convention centers were aggressively competing for her business. She was leaning toward one. But when the other center, which was in a downtown area, realized that it was about to lose the business, it came up with an offer she couldn't refuse. And she didn't. But she should have.
“In the citywide package, we saved $400,000,” Marcavage says. “They charged me a nominal fee. It was almost like giving us the building. This was a city desperately trying to get pieces of businesses. Their hope was that once we got in, we'd love it and tell other people.
“It was not a good show for us,” she continues. “We will not go back. Our attendance was way down. The other venue was in an area that was easy to get to. But the one we went to was a downtown convention center, and the perception was that it was difficult to get to. It got to the point we reimbursed our attendees for parking, which we've never done. Unfortunately, we were trying to put a round peg in a square hole.”
It Should Be Mutual
There must be liability insurance, of course, but Pat Philips says you can negotiate to cover both the licensor and the licensee. “If there is an act of God, a tornado or earthquake, not only is the facility covered, so is the show,” she says. “Cancellation, indemnification, liability andshould protect both parties. It should be mutual.”
“Don't assume a form contract is intended to do anything but protect the person who prepared it,” warns Jed Mandel, head of the association practice group at the Chicago law firm of Neal, Gerber & Eisenberg and a TM columnist. “The big convention centers all have model agreements that they developed over the years. They [Those areements] are designed to cover everything that might come up. If you're doing a private trade show that will have public events, there will be things in there that need to be stricken.” Most contracts, for example, say that no food may be served as part of the event, but when the National Restaurant Association goes into a facility, Mandel says, it's going to get that clause modified. And what if a blood drive is part of your mission? The standard “no vehicles in the convention center” provision would need to be discussed.
With a publicly owned convention center, it will be difficult if not impossible to negotiate an indemnification provision. But the degree to which the trade show must indemnify the convention center is highly negotiable. “Whether you're going to indemnify someone against their own negligence is something you can do, but it's something I recommend you not do,” Mandel says. “Provide indemnification, but limit it to something that makes sense. Indemnify your own negligence, but not theirs.”
Finally, there has never been a better time to negotiate more favorable cancellation terms than right now. Because of the events of September 11 and the economic conditions that they exacerbated, many planners are finding greater overall negotiating flexibility. The rules in some cities have been waived and broadened.
“Cancellation clauses, for example, are much easier to negotiate,” Steven Hacker says. “For the first time, we've all been humbled. I signed an agreement today with a major hotel only after striking theand cancellation clause. An event with 25 rooms doesn't need it. And they said OK because their occupancy is 18 percent.”
Even Technology Is Negotiable
Many of the largest convention centers have exclusive tele-communications providers. In those situations, negotiating to bring in your own provider is a dead end.
But that's just the big picture, says Terry Funk, president and CEO of Priority Networks in Boise, Idaho. Priority's main function is providing in-house service for event networking. Among other things, Priority is the exclusive provider at San Francisco's Moscone Center and handles Microsoft Corp.'s road events. Funk explains that when it comes to details such as bringing in your own computers, that issue is far more negotiable than bringing in T1 lines because centers don't want outsiders crawling all over the innards of their facility.
Is the cost of a T1 or T3 line negotiable, or is it set in stone by the phone company?
There are half a dozen tier-one Internet providers . When we do an event with, say, 300 to 400 exhibitors, and 100 need high-speed Internet, they could want access provided by 50 different providers, from MCI to the mom-and-pop outfit on the corner. So it's important to have as clean an access as possible.
Can you negotiate that service as an event planner? It depends on the building. I play both sides of the fence. There are some buildings in which a show producer wants to bring its own provider in and the center says, “No, we already have an exclusive producer.” Some buildings, however, have no such provider.
As part of our negotiations with centers, anybody is allowed to come in and provide service. That's because the minute you mention “exclusive” to show producers, the hair on the back of their necks stand up.
If we go into the Los Angeles Convention Center as a vendor, we get a price list from them to rent their infrastructure and bring in our own connectivity.
If they have an exclusive, it's non-negotiable. If not, planners can get competitive bids between different providers. We see a lot of movement on the event producer side — if connectivity is not negotiable, they'll go somewhere else. The network, with B2B and e-commerce, has become a very important part of the event.
Is the markup negotiable?
Most facilities that have in-house services have a price list and order form to give to anybody off the street. Large show producers can say, “We're going to bring in 400 booths. Here is the number of Internet connections we brought in last year. Can we get a discount on our connections for show production?” Certainly, there is a discount structure for event managers. If they bring in enough off-the-street business, we can give them a good discount, perhaps 10 [percent] to 20 percent.
Is a flat fee charged, or is price based on actual usage?
We charge a flat fee of $995 for an Internet connection and three IP address for the whole show. Some outfits charge by the day. There are some packages that charge by usage and the provider graphs how much bandwidth the customer uses. We stay away from that because it becomes a billing nightmare.
If show management has 40 or 50 drops in a building themselves, we'll quote a price based on knowing they have that kind of quantity.
Are technicians' fees negotiable?
We don't charge a technician fee. That is part of the package. Some companies do charge $50 every time they send support personnel to a booth. I can't say those fees are negotiable; we just don't get into it.
What else is negotiable?
If it's a corporate event like the Intel Developers Forum in San Francisco, they'll want a T1 directly from their offices into the facility. That type of thing is negotiable. In the broad picture, from an event manager's standpoint, as long as it's not a very small show, anything is negotiable in a nonexclusive building.
Don't Bother Trying
While an “everything is negotiable” attitude can help organizers think creatively about the deal-making process, some issues simply are not debatable. Union regulations, most fire regulations, and structural integrity issues are not negotiable. Then there are ironclad facility-specific rules and regulations. One hall requires that anything larger than 400 square feet needs the building engineer's stamp of approval, or that anything more than 12 feet tall must be positioned near a sprinkler system.
Insurance regulations are not negotiable. Exclusives are not negotiable. “If there's a caterer in the building, you're not going to bring in another caterer,” says Kelly Cook Marcavage, principle of Casey Enterprises in Collegeville, Pa. “Not to say the rate they quote is not negotiable.”
Of course, there are always exceptions — even to the seemingly nonnegotiable. A catering exclusive, for example, might be negotiable if you want a kosher dinner and the center's kitchen is not sanctioned.