Contract Negotiation For Meeting Planners

Welcome To Our

Continuing Education Series

Conquer the Jungle

Our current time

in the area of

hotel proposals and contracts

are different than they’ve been

in the recent past.

The economy’s pick-up has put

the hotel industry

back in the driver’s seat

and the planners are experiencing

a seller’s market.

There is high demand

and low supply

of available meeting space

and guest rooms.

Start With a Solid RFP:

● Provide history, pattern, flexibility, audience, and decision making

process and timeframe

● Disclose important decision making factors

● Always have a conversation with the Sales Manager

● Compare all RFPs side-by-side to allow for best negotiating

between properties

● No charge from in-house AV nor security for utilizing an outside AV

provider

● 1:40 comp/1:35 comp

● Free meeting space

● Site visit / staff guest rooms at no cost

● Wifi

● Discounts from catering, AV, outlets, etc.

● Etc.

Consider Concessions You May Want:

● Request rebates / commissions

● Include mutual indemnification clauses

● Review payment terms for hotel based on client’s cash flow

● Add in rebooking clauses

● Request that meeting rooms cannot change without written

permission from the client.

More Items to Consider:

Be prepared to sign contracts quickly

because demand is high and availability is low;

and ask for “signing bonuses” if the sales manager is under pressure

to meet month/quarter deadlines.

Act Fast!

Let’s Help The Venue – Everyone Wins!

Ask what holes need to be filled if dates are flexible;

you might have a better value contract

if the hotel needs to fill a specific “niche”.

Legal Issues

● Understand the importance of a written agreement and appreciate the

potential for litigation as a worst case scenario

● Always maintain a good paper trail

● Use caution when negotiating non-economic items (e.g., risk

management)

Room Block Attrition

● Right to reduce before?

● Minimum pickup

● Per night or cumulative?

● Dollar multiplier – lost profit vs. lost revenue

● Treatment of resold rooms

● Right to audit pickup and resell numbers

● Credit for all group rooms regardless of rate paid or method of

reservation

Function Space Attrition

● Watch for attrition issues

● Other groups

● Conflict avoidance

● Specify groups

● Reassignment of space

● No reassignment without prior written consent

● Quiet Enjoyment

● Cover noise, odors, dust

Rights of Cancellation

● With cause

● Without cause

Force Majeure

● Acts of God

● Acts of War

● Strikes

● Other

● Not poor attendance or business conditions

Common Force Majeure Issues

● Illegal or impossible

● “Grocery list” with “catch all” statement

● Standard of impact

● Perform anyway

Construction or Renovation

● Notice

● Group gets to decide whether construction will impact its meeting

● Specific representations for known construction projects

Strike or Labor Dispute

● Cover both legal strikes as well as any type of labor dispute

● Disruption in services

● Notice and right to decide if it will impact meeting

Change In Management

● Could be management company or rebranding of hotel within

management company family

Cancellation by Group Without Cause

● Sliding scale

● Negotiate date parameters

● Fee based on lost profit or revenue? Include food and beverage?

Cancellation by Hotel Without Cause

● “Grocery list” approach

● Include indirect and consequential damages and attorneys’ fees