Knowing the total value of your small meeting will enhance your negotiating position, as this expert details.
It's a given that the better the deal you can negotiate for your small meeting, the more value you bring to your organization. So it's important to know what you can do to sweeten the pot for the hotel when your meeting will take up fewer guest room nights than perhaps the hotel would like.
We asked David Lutz, CMP, executive vice president of Conferon, Twinsburg, Ohio, a planning firm that handles meetings of all types and sizes throughout the United States, to discuss some small-meeting challenges and what meeting planners can do to improve their negotiating positions with hotels.
* AM: Why do small-meeting planners have such a hard time finding the right space at the right time?
* David Lutz: It's a real Catch-22. If you try to book farther out, say a year or more, the hotel may say it has nothing available. What that really means is that they have nothing available right then because they don't want to book space they might need for a larger meeting. However, if you call back after they've booked a larger group, they might want your group because it will fill a gap for them. On the other hand, if you go short-term, your chances of getting a good rate increase, but the pickings might be slim.
*AM: Does this mean that hotels don't consider small meetings to be very valuable business?
*DL: Not at all. In fact, short-term small programs are definitely desirable for hotels--if they have the space to accommodate them. You could have a very good negotiating position, as long as you're filling a hole for the hotel. And the common concept that you don't want to be a small fish in a large pond is becoming less true these days. Small meetings are the bread and butter for many large properties, and, while you will be more important to a smaller hotel, the larger ones are getting better all the time at handling small meetings.
*AM: What can planners do to strengthen their negotiating position?
*DL: The more flexibility you have, the better the deal. If you can be flexible in your dates, give the hotel the choices of meeting dates you could consider. Also let them know if you are willing to consider areas other than downtown for your meeting, such as the suburbs or the airport.
It's similar to buying a car: You're best off if they know you're looking elsewhere, you're flexible, and you're willing to walk away from the table. You also get some leverage if you can take a number of small programs to the same hotel or chain.
Also check to see if there's a citywide convention in town. A hotel that's not right by the convention center may have a convention room block filled, but all the business other than room nights is going to be near the center. If you book only 20 guest rooms, but need meeting space for 200 to accommodate the local drive-in people, your meeting will definitely be a space-hog. But it also could be an excellent piece of business for the hotel.
*AM: What should small-meeting planners know about the hotel side of the negotiating process?
*DL: Hotels these days are concentrating on lowering their transaction costs so that they can close many meeting sales as quickly as possible. This means they want to shrink the negotiating and "contracting" time. You can help to streamline the process and to lower transaction costs by putting as much information as you can on the table up front. Tell them how many rooms you need for how many nights, what your pickups have been for similar meetings, and what you need in terms of food and beverage. The hotel will keep score for you--they probably know the value of your meeting better than you do. When you state your needs in the beginning and get it all down on paper, you're cutting down on the small talk and getting to the core deal more quickly.
*AM: How does the hotel's desire to speed up the transaction mix with the inevitable slow-down that occurs when you negotiate for concessions?
*DL: Well, if you want to negotiate a lot of concessions or discuss a lot of contract issues with the hotel on a small-meeting booking, it'll become less desirable to them because it increases their cost for the transaction. You have to ask yourself: Is it really worth the time, aggravation, and, from the hotel's point of view, transaction costs, to negotiate for two hours to get a $2 per-person reduction on a chicken lunch for 20? After all that time and effort, you end up saving only 40 bucks. And, because this type of work is being outsourced more often these days, you aren't showing your true worth as a meeting planner to your organization. It's all a matter of value.
*AM: So, you're saying that the time would be better spent adding value rather than saving dollars--what exactly does that mean?
*DL: You have to think in terms of how to make the experience as positive for your organization as it can possibly be. You have to understand why people come to your meetings, and how you can help to fulfill the goals of the meeting. That's what makes you, as a meeting executive, important to your organization. It's the intangibles that will escalate the value of the meeting for you as a meeting planner. I've never heard of anyone who wouldn't come to a meeting because they didn't like the chicken lunch.
Five Factors That Determine Room Rates Hotels are becoming more like airlines, with different guest room rates that fluctuate based on availability--in other words, the rate you are quoted today might be quite different from what you would hear tomorrow. However, there are a number of calculation factors that the hotel will rely on when deciding the rate you'll be quoted:
*Time of year your meeting will be held. Rates go down during slump seasons.
*Lead time. For small meetings, that usually means the shorter the lead time, the better the rate.
*Arrival-departure pattern. Sunday is the slowest day for most hotels, so groups that book over a Sunday tend to get better rates.
*Size of the group. Generally, the bigger the group, the better the rate. But you can work the reverse of the rule if your small meeting has a short lead time or will fill a hole.
*Meeting-space-to-guest-room ratio. While you can count on getting more meeting space when you're booking more guest room nights, adding food functions or using the space when the hotel is full of transitory guests who do not require meeting rooms can score you more space than you might expect.