Negotiating is both a science and an art. In meetings, things are going to change, and change quickly. It's important to understand the need to be flexible in negotiating. With that as the first fundamental, here is a list of important things to keep in mind before, during, and after a negotiation:
Don't let legal issues confuse customer service. If you don't know what something means, and the hotel representative doesn't either, then there is a problem. If you allow that to happen, you could face a disaster down the road.
Recognize what the climate is. Is it a buyers' or a sellers' market?
Information is power. The more you know, the better you can negotiate.
A good negotiator is someone who knows what it is they want and what they have. Instead of approaching a venue and saying, “Tell me about your venue,” you should be saying, “Let me tell you about us, our group, and our buying power.” If you do that, then the other side begins to say, “I've got to get this piece of business.”
Know the total value of your meeting: room nights, food and beverage, the purchasing of in-room movies, and everything else that is spent. Know and give yourself credit for every penny that your group spends. This information gives you negotiating power.
Write a clause into your contract that says you will receive the history of the meeting (an accounting of everything that your meeting spent) before you pay. Hotels today have very sophisticated accounting systems; insist upon and make sure that you get your groups' spending information.
Know as much as you possibly can about the person or organization with which you are negotiating. Ask about other religious groups that have met at the facility. Who are the people that they dealt with? Call those people and find out about their experience. (Suppliers will ask about your recent meetings and will be calling to find out about you and your meetings.)
Determine your priorities. On a legal pad, make three columns, one for “needs,” one for “wants,” and one for “interests.” Needs are the things you absolutely must have. These might be dates or number of rooms, or access to a convention center. Wants are things you would like to get, but are flexible about getting. Interests are things that would be nice to have — free valet parking, perhaps, or no charge for incoming faxes — but they're not critical. When you have determined your priorities, you can enter negotiating with a clear sense of where you stand, and where you have flexibility.
Determine the priorities of the person with whom you're negotiating. What are their needs, wants, and interests? After doing your homework, you will be able to do this, and you will be a terrific position to identify the value you bring, and the challenges you face.
Determine the style of negotiating that the other side will be using. North Americans are very linear in negotiations. That is, your negotiations go from item “A” to “B” to “C,” like an outline in a college course. Outside North America, styles can be different. The Chinese, for example, might jump from “X” to “C” to “A,” and then back to “X.” You're never done negotiating. When in a situation like that, never lose track of your priorities.
Start with the most important items first. Many people ask if they should you negotiate price first. Yes, if it's the deal-maker.
Start out friendly. Remember that this is a relationship.
Consider starting with a minor issue. This will give you an early indication of how the person negotiates, and you can use that knowledge to your benefit when you're negotiating major issues.
Remember that the No. 1 driver for hotels today is RevPAR: revenue per available room. Everyone involved in hotels sales is evaluated on the basis of RevPAR. If you can create a high RevPAR, then it helps your negotiating position. If not, your position might be weak. If you request something that will have a negative effect on RevPAR, then expect to have to give something in return.
Use RFPs. Planners should create them, and properties should examine the RFP before communicating with the other side.
Never give something up without getting something back.
Make time work for you. Never reveal how much time you have to negotiate the deal. When you do that, you have given away some of your power in the negotiations. If you are asked how much time you have to negotiate, answer by saying: “I have as much time as it takes to successfully complete our negotiation.” Bottom line: Give yourself flexibility.
Give yourself options. If your board has mandated that you meet in Chicago on specific dates, do not let the other side know that information. If you do, you have no leverage. To prevent that type of situation, let your board know that you need options.
Adhere to the 80/20 rule. Spend 80 percent of the time in negotiations listening and 20 percent talking. When you listen, you gain information, and information is power.
Use silence. North Americans abhor silence. Use this fact to your advantage. For example, if the sales manager says: “We can give you these rooms for $100 a night,” don't say anything, and see what happens.
Create trade-offs. If the “needs” have been satisfied on your chart of priorities, go to your “wants” column and use these to complete the deal.
Determine the real agenda. Always ask why the other side needs a particular item in the negotiations. Knowing the “why” insures that both sides understand each other's positions.
Keep good notes and keep them up to date.
Always leap at the opportunity to write the contract. It allows you to put on paper what it is you thought the deal was that you made. It forces you to read the contract.
Be date-specific in the contract. Instead of saying “90 days before the meeting,” say “on May 1, at 3 p.m.” This type of specificity prevents problems of interpretation.
This article was adapted from a tutorial given at a past RCMA by Jonathan T. Howe, senior partner, Howe & Hutton, Ltd.