A recent survey of more than 200 business-event planners by Global DMC Partners found that their top five challenges this year are adapting to higher costs; finding availability; budget management; timely approval from internal decisionmakers; and contract negotiations. Sound familiar?
Finding ways to solve these challenges was the focus of a September 24 webinar hosted by Global DMC Partners titled “How to Negotiate in a Supplier-Driven Market.” It featured seven planners and suppliers who offered their perspectives and advice for meeting organizers to get what they need while staying on budget.
Get Off to a Good Start
In this sellers’ market, timeliness is one of the most important elements of securing an event contract that works for all parties.
Matthew Franks, director of events for DRPG Group, said that planners must learn from their stakeholders “what is most important to them, and then balance that with an open-minded approach" that explores the possibilities for added-value opportunities on property that justify the costs, especially with food-and-beverage events.
From the supplier side, Norma Howard, complex director of group sales for Conrad Punta de Mita and Hilton Los Cabos in Mexico, said planners should “share problematic contract elements and clauses early on to make it easier to negotiate and find common ground.”
For groups that will use a DMC for a meeting, “engage us as soon as possible for our local knowledge of hotels—how pricey and how negotiable they will be in a given time frame, even on audiovisual elements,” said Erin Lipman, national sales director for destination management company Destination Concepts. “The more clarity you can provide up front on your needs and budget,” the more time there is for negotiating and contracting.
Further, she noted that a group’s timely response to an attractive proposal from a property acts as protection. Why? “If you take four weeks to make the decision, the rates offered might not be the same at that time. Lock in rates as early as you can” and then the focus can turn towards partnering with the property to build out the event’s experiences.
However, “make sure you are really thorough in the contract—if something is not in the contract, you are not going to get it,” said Becky Cavanaugh, HMCC, program director, global medical meetings and events for Cadent powered by Syneos Health. “Read every line closely” and be prepared to clarify or alter terms.
Working Through Difficult Negotiations
When costs at a property are simply too high, “leverage your overall buying power to solve an impasse,” said Braeden Quigley, director of sales and marketing for the Grand Hyatt Baha Mar in the Bahamas. “A multi-year or multi-event deal could get you what you need” both in that moment and for those future meetings.
Lipman noted that one of her clients alternates a series of meetings between two properties. Besides securing better rates, “the contracts and the planning are much easier to get done because the hotels already know the client’s profile, needs, and expectations.”
With F&B costs stubbornly high—and a service fee of anywhere from 20 to 28 percent added to each meal and reception—planners should push the host property to be an active partner in delivering F&B experiences that enhance the atmosphere of the meeting.
“It can be fun for chefs to participate in the creativity of F&B events and accept the challenge of doing it on a given budget,” said Catherine Chaulet, president and CEO of Global DMC Partners.
Norma Howard added that “the chefs on property very much want to be involved in creating memorable experiences. Use our chefs as advisors—give us your budget up front and we can figure how to create a customized menu that incorporates local flavors” and an authentic atmosphere.
Within their own organizations, planners might need to negotiate with their procurement team for the budget to deliver the desired F&B experience. For instance, pointing out the advisory services of a property’s culinary team—along with the on-site interaction the chefs will have with attendees during the event—could win the day. “You can say to procurement, ‘This is the added value we get for that price, and this is why it will be a memorable experience,’” said DRPG’s Franks.
He also suggested one budget-saving tactic that might satisfy both the host property and the procurement team: The group makes the final payment within 30 days of reconciliation rather than 60 or 90 days in return for a discount on the total event bill.
Getting Around AV Exclusivity Clauses
Matthew Byrne, president and executive producer for Byrne Production Services, provided an inside look at how hotels contract their audiovisual services. Specifically, they often leverage an exclusivity clause that inflates AV pricing to unreasonable levels.
Byrne said that at most hotels, “about 70 percent of their meeting business involves smaller sessions requiring a projector, a screen, and a few microphones, which they have on property. But for bigger meetings with complex needs, properties usually have to get it from an outside vendor—even though [the AV team on property] goes by a big-name production company, it only has inventory that matches the needs of their biggest clients” and doesn’t maintain much equipment on site or even in local warehouses. So, “when the on-property team outsources, it marks up those costs and then adds a commission,” making prices untenable for many meeting hosts.
However, knowing all this allows planners to negotiate the exclusivity clause, according to Byrne. “Ask a lot of questions before you sign the contract. Then you can say, ‘I see that you don’t have all the equipment we need and that it must be brought in. So, let’s specify how much of our event you can do with your own equipment, and you can keep your exclusivity for that. But let us bring in our own vendor for the other stuff.’” The property might charge fees for load-in and load-out of outside equipment, though.
Becky Cavanaugh stressed that having a detailed conversation with the in-house AV provider is a must. “If I don’t have time for a site visit, I get them on the phone and ask a lot of questions,” she said. “How old is their equipment? I’ve often found that what they provide is not the most up-to-date, or their projectors don’t have the number of lumens that we need, or other issues.”
Also, “how experienced is the crew that will service the meeting? I’ve seen situations where their people are so new that they don’t know how to work an audio board,” said Cavanaugh.
“A lot of planners feel intimidated about AV when they hear from the in-house vendor, ‘We have it all taken care of; you don’t have to worry about the details,’” added Byrne. “Yes, you do. It’s too important to not ask questions and come to a common-sense agreement” with the in-house vendor about what their exclusivity will entail.
Cavanaugh’s final advice for planners: “If AV is not your strength—you don’t know enough about what is on the equipment list and what the alternatives are—you need to learn it, or else the cost and quality will not be what you need.”
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