Meetings are big investments, and although there are many meeting value components to consider, cost savings remains at the top of the list for meeting planners today, especially when it comes to successful Strategic Meetings Management (SMM).
To assure cost savings, planners must understand their leverage for each meeting. This starts with evaluating your RFP against hotel revenue management criteria, including total room block (hotel's biggest profit center), peak night pattern, F&B contribution (second biggest profit center), rooms to space ratio, season and ancillary spend.
Have A Negotiations Plan for Better SMM
Establish specific needs and priorities for each meeting based on feedback from key stakeholders, which will define your value based negotiations plan. Key cost savings components include:
• Sleeping Room Rates - Rate integrity process
• Value Added Concessions - Prioritize for each meeting
• Published Rate Clause - No lower group rates via website after contract signing
• Attrition - Guarantee percentage of room block / no sliding scale fees / damages based on profit not revenue
• Cancellation - Sliding scale damages on profit not revenue / resell / if damages, apply to future meetings
• F&B Guarantee - Allowable attrition
• Hotel Fees & Surcharges - Eliminate or reduce
• Resell / Audit - Resell / credit accountability, percentage of damages applied to future meeting
• Relocation - Accountability when attendees “walked”
• Construction / Remodeling - No construction or renovations over meeting dates that impact meeting, image, logistics, guest experience
• Unauthorized Changes - Hotel not to change or alter contracted room block, meeting space, services without written approval
• Meeting & Event Space - Complimentary / no sliding scale fees
• Force Majeure - Termination without damages
• Breach By Hotel - Failure to provide services as agreed render Hotel liable for direct & indirect damages
• Legal Department Language - Indemnification, insurance, dispute resolution / arbitration, bankruptcy, successors & assigns, etc.
Six Steps to Value-Based Negotiations:
• Utilize a strategic RFP / assess your leverage for each meeting
• Assess your revenue contributions / leverage from each RFP
• Track meeting activity and spend, by category (contracted rooms vs. actual, F&B revenues & ancillary spending)
• Have a negotiations plan and goals for each meeting
• Create a custom hotel contract, ready for signature
• Generate a cost savings / risk reduction / cost containment report for each meeting.
In today's Strategic Meetings Management (SMM) environment, it is important for meeting planners to have a negotiations plan and communicate meeting value components to senior management and stakeholders. Value based negotiations and communicating meeting value will be a big benefit to your organization...and career!