As I edited an article about the hospitality industry’s gradual shift from buyer’s to seller’s market (at least in certain markets), I was reminded of a Northeast discount clothing chain, Syms. Its branding message in its commercials in the 1970s, ’80s, and ’90s is one it still uses today: “An educated consumer is our best customer.”
I think that message has resonance for the association meeting professional who is navigating today’s shifting marketplace. Several of our legal and negotiating experts recommend that planners “think like a hotel revenue manager,” when entering hotel negotiations .
Here’s some advice from industry attorney Steven Rudner, Esq., Rudner Law Offices, Dallas, which didn’t make it into the story. Rudner represents hotels rather than planners, and here’s how he sees hoteliers’ current state of mind, which you might find startling:
1. Fewer hotels are agreeing to give credit for rooms resold. While groups continue to ask for clauses that give them credit when rooms are resold, Rudner says, “where the parties have entered into a contract which contains an enforceable liquidated damage clause, there is no duty to give credit for rooms which are resold. The hotel is legally entitled to collect payment from the group for the rooms it failed to use and also to resell those rooms to others.”
2, Fewer hotels are willing to put cancellation or attrition payments as credit toward a future booking at the property. “I think hotels realized that what that does is essentially make them hold rooms out of inventory twice to be paid only once. Certainly as the economy gets
better, that is an idea that will be much less palatable,” he says.
3. As hotel contract addenda have dramatically increased, fewer hotels are willing to incur the expense of reviewing multi-page addenda, particularly for smaller meetings. The hotel’s view: “We’re certainly willing to work with you on some of the terms, but if your meeting is a $20,000 value and you give me addenda that’s going to cause me to incur $3,000 or $4,000 in legal expenses, I cannot make a profit on your meeting.”
Changes in mind-set mean you need to be fully armed not only with the history of your meeting, but with the market conditions in the cities you’re interested in, their average daily room rate, revenue per available room, their need times, and other essential data to get the best deal.
You don’t need to enroll in Economics or Statistics 101. There are plenty of resources at your fingertips. One of my favorites is STR Global, whose offerings range from free subscriptions to its wholly-owned news source (hotelnewsnow.com), to yearly paid subscriptions, to in-depth lodging reports and one-off reports on a particular city or market.