Tipping is the multibillion-dollar exception to the rule that people won't pay more than they have to: Restaurant patrons in the U.S. alone fork over about $16 billion in tips every year. One can only guess at how many billions meeting planners add every year to the tipping pool.
With so many dollars at stake, it would seem we should have it down to a science, but we don't. As Gary Rosenberg, CMP, Rosenberg & Risinger, The Meeting Professionals, Culver City, Calif., who teaches classes on meeting and convention planning, says, “I think it's because it's one of the most mysterious areas in meeting planning. Nobody really knows what's appropriate or expected.” Fortunately, there are some general guidelines to go by.
The Right Equation?
Rosenberg did some research a few years ago to determine average amounts meeting planners tip. “One system was to budget $1.05 per attendee for gratuities. Another system said that gratuities should be $167 if you have a meeting of under 50 rooms; $307 if your meeting uses 50 to 150 rooms; and $591 if you use more than 150 rooms. Those figures should all be increased by at least 20 percent to be current now.”
But, he adds, it really depends on the meeting. A simple meeting using 500-plus rooms just won't require as much “above and beyond” as a very complex smaller meeting.
“For 12 years I held an association meeting with between 1,200 and 1,400 attendees, but my tipping budget was only $200 because we didn't need a lot,” says Rosenberg's partner, Marjorie Risinger, CMP. Also, she says, “If you're holding an association event with 30,000 attendees, I seriously doubt you're going to spend $30,000 in gratuities.”
Another system often batted about is to use a formula, such as planning to tip one and a half percent of your bill. But most planners polled for this article don't like to use a formula because it feels like they'd be tipping people just to do their job, and the facility already pays them to do that.
There are some standard tipping structures for the hotel environment a planner can rely on. For example, when the association takes care of bellhop tips for attendees — a common practice — planners should count on about a buck per bag.
Other standards include $5 to $10 for concierges who provide extra services for the group; $1 to doormen for hailing a cab; $1 per day for housekeeping (daily tipping is preferred because different staff may work on different days); 15 to 20 percent of the bill for spa services, unless a service charge is included; and 15 to 20 percent of the bill for wait staff at a banquet. As for the rest, it's up to you.
Greasing the Palms
Gail Girard, director of meetings for the New Jersey Bar Association in New Brunswick, N.J, says she's “very into tipping my convention manager, the floor people, catering staff — the people who don't make the big bucks.”
For Orlando, Fla.-based independent planner Joyce Steele, Joyce Steele and Associates, the banquet manager and catering team, the CSM, and the sales manager usually get tips. Other possible tippees include housekeeping staff who clean a hospitality suite, bellmen, doormen, and anyone who is assigned to her group for an extended period of time.
Even front desk staff, who, according to Manny Gonzalez at The Original Tipping Site (www.tipping.org) almost never get tipped, may get a gratuity from her group. As Steele says, “Room blocks are tough to keep track of, especially if you're dealing with a lot of different room types. Sometimes they have to do a lot to get your rooms right.” Group reservations also can be on Steele's tip list, as may be a recreation staffer who's really done a good job on a golf .
Risinger says she always tips the AV technicians — “those guys make peanuts, and the success of my meeting so often depends on them.” She also takes care of the setup staff, because they're the ones who have to change things at the last minute. Telephone operators who do an outstanding job also make the grade for many planners, some of whom make a point of sending baskets of flowers to the switchboard and PBX room to thank them for getting attendees' messages to them quickly.
But how on earth can you keep track of all those names? “I'm really bad at it,” says one planner. “If I'm able to, I write it down as I go. But a lot of the time I end up asking my banquet manager or CSM to help me out with names at the end of the day.”
Steele asks the CSM beforehand who might be on the tip list. “It could even be someone in engineering Who would know? You have to ask your CSM.”
As Girard says, it varies from meeting to meeting, and hotel to hotel. “If someone is really there to help, they deserve it. I had one meeting where the attitude, the nonservice, of staff and management was less than desirable. Why should I tip if they did such a poor job?”
On the other extreme, she says, was a banquet she did at a property in London. “The service was unbelievable. They had six banquet captains and 120 servers for about 850 people. I was just hoping I had enough pounds to take care of them all.”
Keep in mind that tipping customs vary in other parts of the world. Go to www.meetingsnet.com and click on the Beyond Borders button for more on international protocols.
Timing Is Everything
When to tip is another gray area. While most planners hand out the gratuities after the meeting — after all, you can't know who goes above and beyond until they've done the job — there are times when it makes sense to flash some cash early. Planners agree that one-time service people, like the guys who haul in your boxes, should be tipped on the spot. Suzette Eaddy, director of conferences for the New York City-based National Minority Supplier Development Council Inc., says, “If I start having troubles with the place, I'll start throwing money around early to get them to do what I need to get done.”
While she usually tips post-con, Girard tells of one occasion when she changed her modus operandi. The New Jersey Bar Association was doing an open-invitation brunch for the first time at its annual meeting in Atlantic City. “I went out on a limb and reserved for 300, thinking maybe 200 or 250 would show up,” she says. “Well, 450 showed up. People were standing around in groups of 10 with plates in their hands, waiting for a table. I was in back fanning money around to get those tables rolled in. It was bizarre.” But it worked.
The Best Gifts May Be Free
Most planners polled for this article put their CSM at the top of their gratuity list — and for good reason. Risinger tells of one meeting she did in Anaheim, Calif., that involved panthers — you read that right, panthers. “The convention services people literally built a cage from the truck to the waiting room to the lounge. If it weren't for the CSM, it would never have happened.”
Of course you want to tip these special folks. The only caveat, says Risinger, is if the CSM is considered to be hotel management: “Then they might be offended by a tip.”
If a cash gratuity isn't appropriate, or if it doesn't seem like enough, there are other ways to thank them. “I had one CSM who literally lived that meeting with me,” says Girard, who made her CSM smile with a cash tip, but brought her to tears with a plaque from the Bar Association. Spa baskets filled with lotions, shower gels, and candles also can be great gifts, as can books, gift certificates to a favorite store, a donation in their name to the hotel's main philanthropic organization, or even a simple hug. Letters to the hotel's general manager, or, even better, the chain's CEO, are really good thank-you's, says Steele. “Then the president of the hotel company turns around and recognizes that person. That's really something.”
Then there are convention center staffers, who often are union members who aren't allowed to accept gratuities, even when they work like dogs. Ask if you can contribute to their holiday party, or have a pizza party for them. If you give them a gift basket, make sure you do three baskets to cover the three shifts.
Risinger tells of one meeting where everyone from the front desk manager to the director of transportation went all out for her. When she handed her gratuity list to her client, he said “Sorry, but we don't tip anyone.”
“I was totally flabbergasted,” she says. So she went to work with her CSM to get the name of everyone who worked on her meeting, then wrote a letter to the general manager detailing what each person did to contribute to the success of her meeting. “That letter was framed and hung in their sales office,” she says. “I think it was more appreciated than $5 or $10 would have been.”
Almost 20 years ago, Keith A. Patrick, who's now director of convention services with Mohegan Sun in Uncasville, Conn., had an experience with a minimum-budgeted church group over New Year's. On the last day of the convention, he treated the planning committee to lunch at one of the hotel restaurants. But he's the one who got the real treat: a simple music box in the shape of an old bell like the ones that used to stand on hotel desks to summon a bellman, topped by a small sailboat. Attached was a card that said the committee felt that he was the “wind beneath the success of the convention.”
“No monetary gift could ever mean so much to me,” he says.
Gratuitous Gratuity Facts
People tip more when the weather is good.
Older people tip better than younger folks.
The more people are in a party at a restaurant, the less they tip: Solo diners average 20 percent, duos 16.9 percent, and threesomes 15.2 percent.
Restaurant servers who lightly touch their customers and crouch down next to them get 20 to 40 percent better tips than those who don't practice nonverbal “liking” behaviors. And the annoying habit of having wait staff introduce themselves is based on science: They get better tips when they're not anonymous.
Tipping is more prevalent in countries whose populations are achievement-oriented, status-seeking, extroverted, neurotic, and tenderhearted.
Sources: Michael Lynn, PhD, associate professor of consumer behavior, Cornell University's School of Hotel Administration; Mark Brenner, author of Tipping for Success; Bernice Kanner, author of Are You Normal About Money?; Taylor Nelson Sofres Intersearch; Manny Gonzalez, The Original Tipping Page at www.tipping.org
While “tip” and “gratuity” mean essentially the same thing, a service charge is a different animal. Tips are voluntary in nature, and usually are given in person, in cash, before, during, or after the person provides the service. In most states, you do not have to pay sales taxes on tips, according to Jed Mandel, a partner in the Chicago-based law firm of Neal, Gerber & Eisenberg.
Unlike gratuities, mandatory service charges are subject to sales tax in most states. They also don't necessarily go directly to the employees, at least not in their entirety. Often service charges are used to offset other expenses, and the hotel pays an above-average salary to the employees to make up the difference.
If you hold a number of food and beverage events over the course of your meeting, that sales tax on service charges can really add up. If they're in theand are mandatory, more likely than not a contractual gratuity will be treated like a service charge by the state taxing authority, says Mandel. Some states may tax it, others may not. When in doubt, check the state laws, Mandel advises.
“The problem is that the gratuity has to be truly voluntary,” he says. “It's not enough to just say it's voluntary in the contract.” He says an example of language that should satisfy most states' criteria would be: “Meeting Sponsor recognizes that it is ordinary and customary to provide gratuities amounting to X percent of the total to service personnel who provide the expected level of service. If the service provided is judged by Meeting Sponsor to be at the expected level, the Meeting Sponsor will, on their own and using their best judgment, provide gratuities in accordance with these ordinary and customary guidelines.”
So how do you ensure that the cash goes to the most deserving people if you put these costs in your contract ahead of time? You can ask the hotel to agree in the contract to replace the mandatory service charge with an agreed-upon dollar-amount pool that will be distributed to various personnel — with the meeting planner's input post-con to make sure it goes to the right staff members. You also can put a sliding scale into your contract that will allow you to tip up to a certain percentage more — or less — than the contracted amount, says Mandel.
The only sure way to keep gratuities out of sales tax range is to keep them out of the contract altogether, says Mandel. Which is fine by Orlando, Fla.-based independent planner Joyce Steele, Joyce Steele and Associates. “I never have gratuities in the contract. I think a gratuity should be an extra reward for exceptional service. How in the world would you know it would be exceptional ahead of time?”