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How to Negotiate with Hotels and Venues

39 proven event planning strategies for negotiating with venues and hotels – Part 2

by | Sep 16, 2014 | Business, Business Management, Catering, Event Management, Event Venues, Venues

Note: This post is the second of a two-part series on event venue negotiation strategies.

Continuing where we left off….

#21 – Customize your event menu

Don’t just accept the pre-set menu from the venue. Sub out certain items that are less expensive (like in-season local vegetables instead of out-of-season vegetables that must be shipped in), or build your own menu by focusing on less expensive options.

#22 – Bonus insider tip

Piggy back onto an event that the venue has already booked by using the same menu as the other event. This can help you negotiate lower F&B costs because the kitchen does not have to prepare multiple menus; you can also use this tactic to minimize or eliminate any minimum F&B spend requirements.

#23 – Always negotiate for free meeting / event space

Many venues will provide complimentary event space if you meet your minimum spends for F&B and guest rooms. If you aren’t booking rooms (or if your venue is not a hotel but is a meeting/convention center or reception hall) but are still spending money on F&B at the venue, use this spend to negotiate a discounted event room rate, if possible.

#24 – Repurpose your event / meeting space(s)

If you are paying for your event space, you can potentially save money by using the same rooms for different purposes. For example, if you have an event with multiple sessions going on at the same time followed by a big session with a keynote speaker, you could look for a venue where a large ballroom can be partitioned. That way you can hold your breakout sessions first followed by an hour-long networking session in the lobby while the hotel staff sets up the ballroom for the big session. If you go this route, you should confirm with the hotel that they have adequate staff and resources to do a quick reset of the space.

#25 – Negotiate for a free hospitality room

If you meet minimum spends for F&B and guest rooms, negotiate with the hotel for a free hospitality room that you can use as a VIP suite, a lounge for your sponsors or an on-site office for you and your event management staff.

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#26 – Maximize your comped room ratio

Many venues have a standard ratio of one comped guest room for every 50 rooms booked, but often you can negotiate this down to 1:40, 1:30 or possibly lower based on your overall spend on the event.

#27 – Negotiate all minimum requirements and cutoff dates

Hotels want to ensure that, if they set aside guest rooms, event rooms and kitchen/staff resources for your event, they will make a certain amount of profit; hence their desire to have you guarantee a minimum spend for F&B and guest rooms, their most profitable items.

The guest room attrition rate clause in the event contract usually states that you will guarantee a certain percentage of the rooms in your reserved block will be booked by your guests; otherwise you will pay a penalty for the unbooked rooms. Standard attrition rates start at 10%-15% (meaning that you must book 85%-90% of the reserved room block to avoid penalties). You can fairly easily negotiate this to 20% or possibly 30% based on the total value of the event.

Your goal is to negotiate the lowest minimum F&B spend and guest room pick-ups as possible, as this will protect you against incurring penalties if your guest / attendee numbers aren’t as high as anticipated.

When negotiating attrition rates, set a date before which you can reduce or increase the size of the room block without penalty. In addition, have the attrition rate be based on total room nights and not rooms per night, and have the hotel work with you to conduct a post-event audit to identify attendees who booked rooms at the hotel but not in the designated room block. These room nights should also count towards your total.

#28 – Ask how flexible their service charges are

You can’t really negotiate sales taxes or tourism taxes, but you can often negotiate a venue’s service charges, which sometimes simply adds net profit on top of all the items in the proposal. Again the higher your total spend, the more you can probably negotiate the service charges.

#29 – Beware of the required vendor list

Some venues have a list of vendors that you must choose from, and these vendors’ prices tend to be much higher than if you used your own, non-approved vendors because the approved vendors are often paying for the privilege of being “approved” by the venue.

Negotiate to be able to use your own vendors, and if the facility will not negotiate on this, get pricing from outside vendors to negotiate with the venue to drive down the costs of their approved vendors. A venue doesn’t want to lose your business because their approved lighting vendor is double the price of a non-approved vendor; they would rather negotiate with the approved vendor to get the price down and keep your business.

#30 – Always negotiate the audio/visual rentals

A/V rentals are often the most marked-up item in a venue’s proposal, as up to 90% of the A/V cost is pure profit to the venue. Because this item isn’t tied to a fixed cost (like labor) and because the hotel is making most of its profits on rooms and F&B, they will be more likely to negotiate on this.

#31 – Bonus insider tip

Use a third-party A/V rental service to drive this cost down even further.

#32 – Ask for free in-room WiFi (and free WiFi in the event space, if possible)

Most hotel rooms already come with free WiFi, so your guests shouldn’t have to pay extra for it. However, some hotels charge as much as $5-$15/day for guest WiFi access, so use your total event spend to negotiate this down.

In addition, many venues have free WiFi throughout the venue, and you should also negotiate for free WiFi at your event. If you are holding a larger event where hundreds of attendees will all be on their smart phones/tablets, or if you are holding a high-tech event, you may need a lot more bandwith and the venue might not be as willing to comp this, so use your guest room and F&B spend to negotiate this down.

#33 – Negotiate both parking and transportation

If many of your attendees will be driving to the event, ask the venue to provide free or discounted parking for your event guests.

If your guests will be flying into town, see if your guests can use the venue’s transportation options (limos, vans, buses, etc.) at no extra cost.

#34 – Make sure you have a favorable payment schedule

Whenever possible, never pay the full amount upfront. Negotiate so you pay a fixed percentage up front and then backload the rest of the payments. This counts double for any registration or ticketed events, when you will be seeing most of your revenues in the weeks leading up to the event. You want to float as little as possible in covering the hard costs (like food, room rentals, etc.) of your event.

#35 – Amend the cancellation clause

If you have to cancel your event, you don’t want to lose your deposit or be on the hook for all kinds of cancellation fees. So add a clause that lets you change the date to hold the same or another event at the venue within a certain amount of time of the original event date.

Also, have the cancellation clause be on a sliding scale so that the further out you cancel the event, the lower the cancellation fee. And make sure the cancellation clause works both ways so that you are protected if the venue can’t host your event after the contract is signed.

#36 – Consider booking new venues

New venues are often hungrier than established ones, and they are often more willing to negotiate and provide discounts. Just make sure that the venue will be ready for your event (this is where the venue inspection is very important) and that you have a cancellation clause that protects both you and the venue.

#37 – Bonus insider tip

Venues with bad or fair social media reviews may also be hungry to book your business and could be more willing to negotiate. Read the reviews to see specifically what people are complaining about and make sure that you inspect these items on your site visit and have the venue address these concerns and correct any issues prior to your event (and put all this in the contract).

#38 – Make sure everything you discussed is in the contract

Promises are great, but people don’t always follow through on their promises, especially if they aren’t compelled to. But if every item makes it into the contract, then promises aren’t necessary because the venue is contractually required to carry out what is in the contract.

#39 – Sign the contract at the end of the month or quarter

Venue managers are often working to meet quotas, and often those quotas end at the end of a month or a quarter. You can even ask the manager, “Would I get a break on pricing if I signed this before the end of the month?”