Imagine this scenario: You're trying to book a hotel for an upcoming meeting, but your hotel salesperson keeps questioning whether you really want to be in that locale, and in that type of hotel. It gets to the point where you feel she doesn’t want your meeting at her hotel. So you come right out and ask—and she admits that the hotel is in need of renovation and it likely won’t be done by your meeting’s date. In effect, she talks you out of booking her hotel. So, you go somewhere else.
Does that make her a bad saleswoman?
Not to James Vachon, associate director, corporate meetings and conventions, Millennium: The Takeda Oncology Company in Cambridge, Mass. In fact, when this happened to him, he became one of the salesperson’s biggest fans because she put the needs of his meeting first. Good negotiations start with being willing to listen to each other’s needs, he told the audience during a session at the Pharmaceutical Meeting Management Forum, co-sponsored by Medical Meetings and The Center for Business Intelligence last March in Orlando.
It just goes to show that even in this era of preferred suppliers and electronic requests for proposals, it’s still all about the relationship between buyer and supplier, he added. While it is still vital to negotiate for what you need, buyers need to stay flexible and hoteliers have to restrain themselves from trying to force a piece of business that’s not a good fit.
There are a lot of things to consider when it comes to negotiating a meeting contract, from rooms-to-space ratios to concessions to addenda. It can be easy to get carried away in your demands, but stop for a moment and think about what’s truly needed for your group, and what you’re willing to concede to get it. For example, if a lower room rate is imperative, can you agree to a room-rental fee or give up a 24-hour hold on meeting space? Can you consider a Sunday night arrival, guarantee a higher food and beverage minimum, or move an off-site dinner to the property? Any of these options might sweeten the deal enough to get the hotel to lower your rates.
Conversely, if your group can absorb a higher room rate, will the hotel comp the Internet access your attendees crave, or waive the fitness center fee? Can it throw in an audiovisual or business center discount, or provide more upgrades and amenities?
When in doubt, ask if a particular item is something you need to have or something you would like to have, said Vachon. “To qualify as a must have, you have to be willing to walk away if you can’t get it,” he said. Be fair—remember that if you reduce your block, you also will need to reduce your concessions. And be smart about what you ask for when it comes to concessions: In today’s environment of close scrutiny, you might not want to ask for a limo to pick up your VIPs.
Your ability to negotiate also will depend on what’s going on in that destination over your meeting dates, so it pays to know occupancy patterns. As Vachon pointed out, your ability to negotiate in Scottsdale during the winter is not as good as it would be in the summer. Vachon’s co-presenter, Claudia Rudkins, CMP, director of sales, worldwide accounts, with Hilton Worldwide, added that it’s important to know if there is a local holiday or some other reason there may be a lot of traffic in that particular city over your dates. If you’re looking to book something the weekend before Memorial Day in Indianapolis, for example, you can think again, said Vachon. The Indy 500 happens that week, and “Memorial Day is booked for the next 27 years. It’s not going to happen,” said Vachon.
And since pharma meetings are notorious for being space hogs with low rooms-to-space ratios, just getting the space you need can be a struggle. Rudkins suggested scheduling your meeting during a citywide, when rooms are already booked and the space is lying fallow anyway. This is one time when pharma’s notoriously short meeting timelines can work in your favor, said Vachon, because “if the space isn’t sold yet, chances are that it won’t be.” Rudkins added that it can help to put your rate cap in the request for proposal. “If you absolutely can’t pay space rental, but your ratio comes close to what we want, we may be able to come close to the rate you want.”
As an aside, Rudkins and Vachon noted that planners should keep certain “Hallmark holidays”—Mother’s Day and Halloween, for example—on their blackout list, especially if their intended audience is composed of people with young families.
Most meeting planners don’t have much to do with a hotel’s revenue manager, but they do need to know that person’s role: “The revenue manager’s job is to drive rate; that’s all they are about,” said Vachon.
While revenue managers are not involved in evaluating concessions, they are responsible for RevPAR, or revenue per available room. This includes items like food and beverage spend and space rental, but remember that room rates will always reign for revenue managers, because “a hotel room can only be sold once. It’s a perishable item,” said Vachon. While you can negotiate, there will be a bottom-line, walk-away price when it comes to room rates, said Rudkins. Once you reach that, “you have to move on to concessions. There’s nothing else we can do at that point.” Added Vachon, “If a hotel can’t be competitive on rates, go with concessions to make it work for you.”
Vachon also suggested creating separate contract addendum templates for large programs and catering-only functions. His addendum includes more than 100 different concessions from which to choose for a specific meeting’s needs; he has a separate addendum for catering-only events.
Don’t forget to include competitor clauses. Imagine if you booked a meeting in a hotel that already had booked another pharma meeting at the same time—which happens to be your competitor’s competitive analysis group meeting—and the hotel didn’t think to mention it to you or the other company? That could be a disaster in the making. But, Rudkins added, if you can, build in a little leniency. For example, the non-compete would apply to the rooms next to yours, but it may be OK for a competitor to meet on the opposite side of a large hotel. And be fair about who you list as a competitor, said Vachon. “Make sure it’s just competitors in that product area.”
It also can be a good idea to specify that no one can just “take a peek” at your meeting while it’s in progress. “I don’t care if it’s just for a wedding site inspection—no,” said Vachon.
Also be sure to define the space you need in the contract. For example, if you need 210 breakouts, you will need to be able to print where the breakouts are going to be in your meeting materials. You can’t do that if you don’t know which rooms you will have, or if the hotel keeps changing them. Another good clause to have addresses guest relocation. “I know what it’s like to look at your arrivals list and see you’ll have to walk people,” Vachon said to the hoteliers in the audience. “But you have to talk to us before you have to move someone in our group. It could be an AV guy, or it could be our VP of marketing.”
Legal items that should be covered include noise abatement, mutual indemnification, dispute resolution processes, bankruptcy, and force majeure. It’s also well worth having a resale clause in the contract, he said. Other items worth covering: cancellation and reduction clauses for F&B and room blocks; facility ownership changes; facility improvement; deposits, billing, and payment; and F&B pricing. For pharma companies, it also can be useful to have a clause that addresses what’s needed to comply with the PhRMA Code on Interactions with Healthcare Professionals.