The rules of negotiating depend on the cultural orientation of the person you are working with — so take off your American hat and put on a different one. Similarly, don't expect facilities overseas to be duplications of their America counterparts. The term conference center in Europe, for example, most often means a purpose-built facility for meetings only, with no hotel accommodations and nospace to speak of. To help you out when working internationally, here are some basic things to be aware of regarding negotiations, facilities, and for events held outside the U.S.
The blunt, cut-and-dried American approach to negotiations does not often work in other countries, the Chinese, for instance, do not approach negotiations linearly at all. Building a relationship before conducting business is usually far more important outside the U.S., so expect to spend time getting to know the person you will be dealing with.
There are few countries where it is proper to expect to be quickly on a first name basis with your negotiating partner. It is better to err on the conservative side by being too formal rather than too casual.
Keep in mind, too, that time is a cultural concept. “Mañana” does not mean, necessarily, tomorrow. It just means “not today,” in some Latin cultures.
Many veterans advise working with a local contact during theprocess as well as through the actual meeting. A destination management company, a professional congress organizer, or a sister organization based in the host country can be an invaluable asset in successfully navigating business relationships in the host country. Moreover, working with the regional offices of many international hotel chains can not only save a planner time and money in phone calls and faxes, but they can help minimize cultural misunderstandings.
Always insist on dealing with the top person in charge. In many countries, only this top person — a general manager, managing director, or international sales director, for instance — is empowered to make decisions.
When meeting outside the U.S., expect to pay substantial nonrefundable deposits, although it may be possible to negotiate a letter of credit in lieu of paying a lot of cash up front.
When not meeting face-to-face, conduct your negotiations by fax or e-mail instead of phone; it's quick, it helps alleviate language problems, and you have a written record of transactions.
Be prepared to pay for meeting room rental; meeting space is at a premium in most countries and food-and-beverage revenues account for a much higher percentage of profits in many hotels around the world. Similarly, don't expect to leverage your food and beverage expenditures to obtain lower room rates. It does, however, pay to have a very good handle on your group's(revenue per available room), showing the entirety to your group's expenditure.
Don't leave the negotiating table without exploring the following legal questions: What will be the official language for purposes of interpreting the? What currency will be used for payment and when is payment expected? Will disputes be settled by international arbitration? Who has the authority to make changes in the contract?
Overseas convention center contracts, say industry veterans, can be quite complicated and may not typically offer the kinds of protection a planner in the U.S. would take for granted. For instance, many foreign venues are reluctant to accept the “acts of God” concept.
Overseas hotel contracts, on the other hand, may be one-page letters of agreement, a much more casual document than Americans are used to. Your best strategy is to push the basics in writing: rates, space, dates, and costs — especially those hidden meeting room costs like setup charges.
Be aware of the phrase “subject to standard terms and conditions.” You need to get a copy of the document that details what those standard terms and conditions are. Another term to look out for: “incorporated by reference.” Don't accept that phrase until you see what it means.
Unless you negotiate anclause in the contract, typically you will be expected to pay for all of the meals and rooms that you book, even if your attendance is less than you anticipated.
There should also be a contingency clause in your contract. For instance, if you are conducting a meeting that involves three hotels and a convention center, the clause should state that if the center space is not available, then you can cancel out of your hotel obligations.
Make sure your organization's insurance policy is enforceable in the host country. It's a good idea to have your policy reviewed by a competent broker to make sure it covers your international event.
If you are meeting in a country that levies value-added tax, make sure the contract spells out that your supplier will break out those amounts that are for VAT on all your invoices. This will expedite the VAT-reclaim process.
Convention centers in Europe are used primarily for meetings, and may be what we call conference centers. Trade fair facilities are exhibit facilities with little or no meeting space.
In the U.S., convention bureaus often sell and sometimes control bookings for convention centers. Overseas centers typically can be booked directly, although bureaus will often have an important role in coordination.
Food and beverage within Asian and European facilities is usually more comparable to restaurant quality than in the U.S. If labor unions are in place, their workers act more like staff, without the complex labor jurisdictions of many U.S. facilities. In addition, technology in most major centers around the world is truly state-of-the-art.
Convention centers outside the U.S. are generally not subsidized by the government, so expect to pay more for their rental and services. Some planners advise budgeting $500 to $1,000 more per delegate and creating a contingency fund that is 15 percent to 20 percent of your budget.
Pricing structures at international convention centers differ significantly from those in U.S. facilities. Some charges that you might expect to be bundled into the basic rental charge, such as staffing fees for personnel who handle registration or coat check, could show up as line item charges. Every facility is different, so be sure to ask detailed questions about what is included in the basic rental fee.
American five-star standards of hotel rating do not apply overseas. And the classification of hotel standards by stars varies from country to country. Hotel rooms, especially in older European hotels, tend to be smaller than what Americans are used to. The best strategy is to give your attendees a heads up, so they won't be surprised.
Mega downtown hotels and resorts are not common in Europe and many parts of Asia. So a group of 300 people often has to be split up among, perhaps, three hotels. For incentive groups, it may be difficult to get rooms of equal quality, particularly if you are booking venues like castles or estate homes.
Historically there have been fewer nonsmoking and universal access rooms outside the U.S., but more of these special rooms are being made available.
There is often no convention services department in overseas hotels. In such cases, it is the food-and-beverage manager who coordinates the details with the meeting organizer.
Given the high demand and relatively limited amount of food-and-beverage space in hotels overseas, be prepared for your function space to be reset in the evening and then reset for your event in the morning.
This article appeared in our Beyond Borders series, an award-winning annual editorial supplement focusing on the needs of planners who take events outside the U.S. Look for the next Beyond Borders with the June 2006 issue of AM.
The most important areas of cultural differences to be concerned about when it comes to international business relationships center around three key areas: appointments (including issues involving punctuality, appropriate scheduling, and food and beverage served), negotiations (pace of negotiations, status of individuals, finality of decisions), and business entertainment (who picks up the check, table manners, the role of alcohol, and seating arrangements).
Doing business in other countries may seem overwhelmingly complex, but if you can master the cultural protocols in these three areas, you'll go a long way toward achieving success.