Hotel Contract Tips
Meetings are big investments and at Meeting Sites Resource our hotel and contract negotiation focus is to add value to meetings and the bottom line, with an emphasis on risk reduction / cost containment. This includes a custom hotel contract process (ready for signature) which starts strategic negotiations.
Top Ten Contract negotiation tips:
- Published Rates – After contract signing, hotel will not offer lower room rates via hotel website or discount travel suppliers.· Any rooms booked around your block to be credited to your organization (include pre/post stays).
- Performance Damages – Based on lost profit, not lost revenue (i.e., $150 room rate X 75% room profit = $112.50.· Food & Beverage (i.e., $10k F&B revenue X 35% profit = $3500).· Do the math.
- Attrition – Guarantee room block, not sliding scale “use it or lose it.”· Example, 400 contracted rooms X 80% = 320 room guarantee (in down economy, request attrition to be waived).
- Cancellation – Sliding scale damages starting at 25% of lost profit, as meeting gets closer, maximum 75% lost profit (specify dates and do the math).
- Food & Beverage Guarantee – Calculate your food & beverage commitment from your RFP using mid-range menu prices.· State your F&B guarantee, less 20% allowable attrition, (i.e., $30k F&B guarantee X 20% attrition = $24k final guarantee.
- Resell / Audit – Add to every contract and avoid liquidated damages, which calculate damages amount (or formula) to be paid to hotel with no resell obligation.· Hotel audit to include print-out of occupancy by night, omit rooms out of service due to renovation and cross reference attendee list against in-house guests over your dates (include pre/post stays).
- Breach By Hotel – Failure by the hotel to provide the rooms, function space and services as agreed shall render the hotel liable for all direct and indirect damages, expenses, attorney’s fees and costs incurred by your organization.
- Relocation – In the event· the hotel is oversold and your attendee is “walked,” accommodations provided at a close hotel of similar quality (at hotel’s expense), guest transportation provided, paid phone calls, priority wait list to return, suite upgrade upon availability and in-room amenity / apology letter from General Manager.
- Construction / Remodeling – There will be no construction or renovations over your meeting dates (specify meeting dates) that impact your meeting and guest experience (image, logistics, quality, noise, or disruptions).
- Unauthorized Changes – Hotel shall not change or alter the contracted room block/suites, meeting or event space, F&B setups, audio visual, etc., without your written approval.
The most effective method to add more value to your meeting and bottom line is to design and utilize a custom hotel contract (not addendum) that is ready for hotel signature. Your custom contract should address all contract components, value added concessions, hotel fees and surcharges (eliminate or reduce), performance clauses and legal department liability language.
Once your negotiated contract is countersigned, you can prepare a cost savings / risk reduction report for each meeting and distribute to senior management and key stakeholders (important way to demonstrate meeting [and your] value based negotiations).
Cost Savings Report, By Meeting
- Sleeping Room / Suites
- Internet Savings
- Hotel Fees and Surcharges
- Food and Beverage Comp / Discounts
- Preferred Suppliers
- Audio Visual Production / Hotel Support Services
- Master Account Discounts
Risk Reduction / Cost Containment Report, By Meeting
- Resell / Audit
- Unauthorized Changes
- Food and Beverage Guarantee
- Meeting and Event Space
- Hotel Fees and Surcharges
- Force Majeure
- Published Rate Clause
- Construction / Remodeling
- Breach By Hotel
- Change In Management / Ownership / Brand
- Legal Department Language
Meeting Sites Resource is a global specialist in meeting site research and hotel contract negotiations and has a long history in adding value to the site search, hotel evaluation, negotiations and custom hotel contract process, all with a Strategic Meetings Management (SMM) focus.
A carefully planned and implemented Strategic Meetings Management plan can save 12% - 20% annually and add meeting value.
Please call if you have any questions on this custom contracting process, or if you need a strategic partner for future meeting needs.
Please contact me if you would like a complimentary copy of “Hotel Contract Negotiation Strategies Checklist.”
- Meeting Sites Resource Professional Services
- Global Site Research & Hotel Contract Negotiations / Custom Contracts & 24/7 Strategic Meeting Management Technology (No cost or fee to you)
- Strategic Meeting Management Services (Fee Based)
- Professional On-site Staffing (SOS)
- On-line Registration & Housing
- Meeting & Event Planning
- Strategic Meetings Management (SMM) Consulting
- Advanced Meeting Technology Solutions
For Additional Information Contact:
Terri Woodin, CMP, Vice President, Marketing & Global Meeting Services
Meeting Sites Resource