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Session 5 contract and negotiation

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  • This week I hope to show you how the concepts and terms we have learned in the previous weeks are applied. I will share some additional essentials and tips for you to consider when undergoing the contract negotiation process. You will also be able to put what you have learned into practice in the next two weeks with the group activity “Who has the best deal?” As you go through these slides you may find that you have some examples of lessons learned or experiences that have given you some guidance to future contract review and negotiation. Please feel free to share these experiences on the discussion board under “Contract and Negotiation Experiences and Questions.”
  • Because this is such a large topic, I have split the topic into two parts. This week we will discuss the basics about contracts and how housing and registration are important factors in your negotiation.
  • The relationship you have with the conference sales and banquet managers can make or break your event or reputation in the industry. When you engage in a contract you are establishing a relationship with the hotel and the people from the hotel who will be working with you on your program. Consider them another member of your team.With this, I thought I would start out with the top ten things that meeting planners do to drive their “team mates” crazy.When we do not comply to the timeline agreed upon in the contract it can cause some tension. When you receive your contract it is very important for you to look at it along side with your program timeline. If there is a deadline that you don’t think is feasible, then you must bring this up even before you sign the contract. Remember, hotels and venues have other clients and guests and have set the timelines so they can provide you with the best service as well as the other groups that are on-site. Keep in mind there are several deadlines – one for when the signed contract is due, they are after all holding the space for you; the reservation cut-off date – this is the date when your attendees should make their guestroom reservation so they can take advantage of the group rate or a secured room in the room block set aside specifically for the group. After the deadline, the guestrooms that are left in the block are released to the general public and your guests would have to pay the prevailing guestroom rate; menu selection deadline – the chef usually needs to know your estimated numbers a couple of weeks in advance but definitely needs a final guarantee 3 days prior; and your final counts deadline- to ensure your conference meeting space is adequate. If you have less guests than anticipated and your room will be too big, the hotel can make room assignments.Hoteliers do not like when we demand a quote and say they will not pay room rental. While its typical that a hotel will offer a complimentary general session room in the contract, this is not always the case. Be realistic. For example, lets say you are hosting a program of 50 local guests. None of them will be staying overnight. The hotel is not making much money on the group relative to a group that had a guest room block for 50 people over three days. In that case there would be revenue that would allow the hotel to give you that freebe. Don’t pretend you know what you are talking about when it comes to AV. If you don’t know, tell your conference manager what your speaker needs are and they can help you or they can have the AV on site help you decide what the best decision is. Feel free to make a separate appointment with AV or to bring your own AV person from your company to the site visitDO NOT over inflate your numbers and request more space than absolutely needed. For one, its not fair to secure space with the idea that “if we use it we use it, if we don’t , we don’t” – this can have a huge financial impact on the hotel even though you will still be charged the room fee. If the hotel could have used an extra room for another group they could have brought in food and beverage revenue as well as sleeping rooms. Be fair and they will be fair to your group back in case something comes up and you need help.There is never any reason to not share information. For the new meeting planner it may seem as if there is or there should be competition between the planner and hotel. This is not the case – the hotel is not out to take more money than necessary = in fact they are your team mates. Remember – consider them another member on your team. They too have a reputation to uphold.
  • 6. It is imperative that you review your Banquet Event Orders prior to signing off on them. Just because you asked for it doesn’t mean it make it in the order. And NEVER assume that something is in there. You must go through each days menu, set up and schedule listed on the BEO to make sure everything is documented. This serves as the instructional manual for all departments at the hotel and the active agreement. 7. If you are planning on sending conference materials ahead of time, be sure your boxes are labeled appropriately. The labels should have your name, the name of the conference manager you are working with, the program name, the dates you will be in-house and what number out of the total number of boxes each box represents. Remember, you are not the only group in house and labeling will ensure your materials get to you when you need them. Typically hotels allow you to bring boxes in 3-5 days prior to an event. Be sure to re-read the contract because this varies, you could be charged storage fees8. If you are not going to be the on-site contact, it is important that you brief the on-site person on every detail of the event. It can be frustrating for the hotel to work with someone who is just there and doesn’t know anything about the program or group. It can also cost the program money if the person is forced to make last minute decisions. The onsite contact should be privy of all aspects of planning and at the pre conference meeting you have with the hotel.9. Your conference manager is onsite to help you. If you run into an issue let them know. Often times they can provide you with the most cost efficient solution. Your expertise about the group and their expertise about the site and hotel function is invaluable.10. While things might come up at the last minute – it is really important to go through each day and create a thorough list or outline or narrative about what will happen on that day. Much like the BEO = everything from who will be there and when, what av is needed at what times, the room set up, are there VIPS etc. Gathering your information and presenting it ahead of time in one document or conversation will save a lot of time and grief. Also, you cannot expect that the hotel can give you want you want if you havent arrange for it ahead of time.
  • Now I would like to talk specifically about housing. The way you decide to set up housing for your guests will be outlined in your contract. There are four ways in which to handle this process. 1. attendees can make their own arrangements; 2. attendees respond directly to facility via online reservation or mail; 3. attendees respond through organizations in-house housing department – which could be you the meeting planner who will then forward the list to the facility; and, 4. attendees respond through an outside housing bureau – third party service or CVB
  • Important terms to know when considering housing at a hotel – The no-show report tells us the actual room stays versus the rooms confirmed. This is important data as you get closer to the cut off date. In some cases you might be liable for the rooms you have held in the room block regardless of what has been booked. This can help you send out reminders to your guests to ensure they will make their reservation in time. OR if you early on it looks like the numbers will be dropped significantly, you may have some leeway here. It depends on how early enough you get the information and the relationship have with the sales manager.The housing list is used when you or your company is paying for any or all charges for your guests rooms. You would include the name, contact email, room type, and what will be paid for exactly. For example are you paying for room charge and tax only or will you pay for hotel parking and any other incidentals. It is also important to list this out for each guest. Do not assume that if you note VIP and you want all charges taken care of that it will be.A housing bureau is an ad-hoc management office for reservations and accommodations. The cost is determined by the services being requested on a fee per transaction or the percentage of the room rate, hotels generally pay for this. Housing bureaus are typically used during a city wide event.
  • Again, the off date is the last day your group can make a reservation as part of the group room block and take advantage of any discount being offered to the group. This is also the last day for you to submit your rooming list to the hotel.Attrition –this is the reduction in room block reserved for a meeting. You should look at this clause in your contract VERY carefully. Make sure you have realistic time for cut off. If you are making a functional budget and it is a buy-out event, you would want a cut-off date that is closer to the vent so there is more time to sell the rooms.Your pick-up report shows the rooms actually used during a specific time period of timeComplimentary rooms are free rooms given or negotiated for during the site inspection. Free rooms can also be earned for purchasing a certain number of rooms for your group. For example, for every 40 rooms you get 1 back from the hotel. You can use these rooms for staff or VIPs. Typically you can ask for a free room for every 40 or 50 room stays. This is VERY important. You want to make sure you put in your contract that you want 1:40 on a cumulative basis. In other words, if you have 40 guests staying over three nights that is 120 rooms, divided by 4 is 3 free room stays.
  • While there are many options and services to assist you with housing, there are many reasons to manage the housing yourself.You have total control of the process. You will have instant information regarding remaining rooms at each property (if you use multiple sites for guestrooms)You will have continuous status updates directly from the conference manager which will help you monitor how many comp rooms you are getting or if your room block is filling or not. Another thing is that you can review the guestroom list to ensure the block is only occupied by your guests. Two of the conferences I run for Harvard Medical School Center for Palliative Care occurs at the same hotel during the same weekend as another harvard department. Often times people call and say they are with Harvard and they get put into the wrong room block. I make sure to mention this so my guests get the discount they were promised. Also, there are some randoms who call and put themselves in a block to get a discount. Make sure you take care of your group.You can also ensure personalized service to your guests – you can reserve a certain amount of smoking.non-smoking, negotiated staff rates )which are usually 50% -60% off the discounted group rate – again make sure this is written in your contract. Any agreements you make with the hotel regarding rooms must be in writing. Even if after the contract is signed and they agree to throw something in, make sure you write an addendum to the contract, sign it, and request a countersignature. Only until the countersignature is there is the contract valid.I would recommend, before getting into this process of housing, that you make a list of what you absolutely need and within the budget you have set. Then make a list of “throw aways” – the things that you think “if I get it, it would be nice” Make sure its stuff you can actually use, for example, an ammenity in the VIP guestroom.
  • Okay…Based on what we have discussed and your readings, lets do a Negotiation Check-In. I am going to read some statements and I want you to think if they are True or False. No need to record this any place, I will tell you the answers as w ego through.
  • The goal for contact negotiations is to reach a win-win. In other words, you, your client, and the hotel should all be happy and in agreement at the end of the contract phase and ready to honor it. Ways to help you achieve that is:Understanding your group – which you will have by contact time with your group history, profile, and any other information you have gathered about past meetings.You will also come to the table with your must haves and want list and you should know the priorities of your sponsors. For example, if they say they need to reward their employees but also conduct some piece of business while onsite, you should plan separate activities and allocated time and appropriate space for such.And finally, you should know the styles of everyone involved. This is especially important with global business. This requires cross-cultural research because if you are negotiating with folks from abroad, things are very different with regard to the industry in other countries. PCMA has a number of great resources listed on their website regarding international travel and meeting planning.
  • So in the end EVERYTHING should be in writing. If there have multiple changes, cross outs – be sure to request clean copies so you and the hotelier can discern what is truth regarding that program.Don’t make any assumptions. Again the hotel does not know your program and cannot assume that you want things to flow a certain way. For example, if there is a speech during the welcome and you do not want servers to interact with the group (clearing or setting) during that speech be explicit. This a detail more related to the BEO but an example of assumption.Be sure to indicate clearly who is authorized to make changes to your master account. If this isnt clear you may be unpleasantly surprised to learn that your keynote speaker requested internet be used in the function space which is easily a few hundred dollars or more depending on the number of people in your group. If you are authorized name on the contract and the request is made, the hotel staff will confirm with you and in this case you can clarify that you need a single connection for the presentation for $25 (for example) versus $300 dollars which is calculated on a per attendee fee – Not all the attendees will be accessing the internetClarify liability – you must understand the language. If you do not, you have to find out because a lot of times the liability comes back on your; therefore it is important to make the liability mutual. Are there any activities that if someone gets hurt could blame someone? Sent it to legal or risk management department in your company review.
  • When you are engaging in contract negotiation remember to present your groups need clearly and to maintain a professional attitude. Control stress and tension – so in other words, if things begin to flare up between your client (if he/she is there) and hotel representative, try to step in professionally and reiterate the need for the must have or if its not a must have try to explain to your client that fact in a way that isnt demeaning and give an indication that there is still much more to do. Try to be maintain the focus.Avoid politics and egosTake time to gather your facts and requirements ahead of time – if the hotel asks you “is this an essential piece to your program” and you do not know simply say “I will get back to you on that”Meet with people with authority to make decisions. Never accept a NO from someone without the power to say YES@ If someone says “no” ask them “can you approve this?” if they say “no” then they don’t have the authority to decide. Ask to speak with the person who can make the approval – assume you CAN have it.
  • Registration is the first impression you give the attendees about you, about the time they will spend at the conference, and about the company. SO make sure you have everything in order!!! And that you are on high alert and ready to address anything that may come your way. This includes knowing the layout of the hotel and important contact people for anything you may need while onsite.Advanced registration is HIGHLY recommended and should be strongly encouraged. You may event want to set up a registration incentive like an early bird rate.Design a thorough, accurate, reliable in-house system for managing your registration. So will you check guests in on the computer, after check in do they need to pick up materials from someone else? Are there separate rooms assigned for certain sessions – how will you let them know at registration etc.Make sure you have sound preliminary planning, marketing and management of the registration process – this helps to minimize walk-ins which can be timely and hold up the registration flow – although if you do have the space and staff you could set up a separate desk for walk-ins and make sure that process is in your plan.When developing a registration form, meeting planners go by the KISS room – Keep It Simple Silly!Make sure you have a very detailed and thorough registration list – especially if there are room assignments or multiple tiers of payments. Make the list so clear that if someone who doesn’t know the group can assist while you are away from the desk.And finally, staff appropriately to decrease waiting times.
  • The Event Specification Guide is all of your details in one binder. Its been referred to as many different things: staging guide, meeting bible, spec guide. This binder includes all of your contacts (including name, fax, number, emergency contact, email), all of your BEOs, the contract with the venue and your vendors, a schedule of events, a schedule of the entire flow from when airwalls should be closed, certain av should be present, room set ups when VIPs come in, VIPS travel agendas, area guides..any piece of information you can possibly imagine would be helpful to you, the client, the hotel, or the attendees.
  • In your list of contractors, meeting staff, VIPS and hotel staff it is important to outline everyone’s role.
  • I hope this presentation was helpful to get you thinking about how you will move forward with your project. For this week I would like you to begin putting together your specification guide for your program. You will build on this, adding in pieces, as we continue through the course. Also, this week you will begin your group project. You have been assigned a role to play in your small group. You will either be the client, the meeting planner, or the hotelier. Please communicate with each other as if you were actually in that role. So for example, the client should communicate with the planner what he/she is expecting and what he/she wants. The planner should interview the client to ensure he/she has all the details needed (i.e. goals) to proceed with the hotel. The hotelier will act in the best interest of the hotel but also being reasonable as he/she would like to earn the business. And so forth. Track the responses and justification for your decisions. You will post these on the discussion board after you have had your Skype session. The session will simulate the actual negotiation meeting. All should be in attendance. Please review the video “Ten Tips for Negotiating Hotel Contracts” and the readings. This will assist you with the assignment.Additionally, for this week, please find and review an article that shares ideas for saving money without compromising impact. Post your ideas and reference in this week’s discussion board. If you have any questions remember to email me or better, post them on the Q&A section of the discussion board so you can get feedback from your classmates.
  • Transcript

    • 1. Session V
      INTRODUCTION TO MEETING MANAGEMENTCONTRACTS AND NEGOTIATION
    • 2. AGENDA
      Project questions – Budgets
      Negotiations
      Contracts
      Housing
      Registration
    • 3. TOP 10 Things Meeting Planners Do That Drive Sales and Catering Managers CRAZY
      Don’t abide by timeline and deadlines outlined in the contract
      “Tell me what my price quote will be. . .we don’t pay room rental!”
      Pretend to understand Audio Visual (AV)
      Over inflate their numbers and request more space than needed
      Not willing to share information
    • 4. TOP 10 Things Meeting Planners Do That Drive Sales and Catering Managers CRAZY
      Sign of on Banquet Event Orders (BEOS) without thoroughly reviewing
      Poor label of meeting materials sent in advance to the hotel
      Don’t allow us to provide solutions to their problems
      On site contact is different from planning contact and does not know the program well
      Call with pieces of information throughout the process
    • 5. HOUSING
      Four ways to handle housing process:
      Attendees make their own arrangements
      Attendees respond directly to facility via online reservation request link
      Attendees respond through organization’s in-house housing department, which gives housing list to facility
      Attendees respond through an outside housing bureau
    • 6. HOUSING
      Terms to remember:
      No-show Report: actual room stays versus rooms confirmed
      Housing List: used when you are paying for the charges, details name, room type and who will pay for what
      Housing Bureau: ad-hoc management office for reservations and accommodations, cost determined by services requested on a fee per transaction or percentage of room rate, Hotels generally pay for this
    • 7. HOUSING
      More essential terms to remember:
      Cut-off Date: last day someone can buy a guest room from the room block reserved for that meeting
      Attrition: reduction in room block reserved for a meeting
      Pick-up Report: shows rooms actually used during a specified period of time
      Complimentary Rooms: free rooms given or negotiated for during site inspection etc. or earned for purchasing a given number of rooms. 1 per 40/50 rule.
    • 8. HOUSING
      Reasons to manage housing yourself:
      Total control of the housing process
      Instant information regarding remaining rooms at each property
      Accurate and immediate information on complimentary rooms earned
      Guaranteed rates for each guest vs. price range
      Personalized service to the participants
    • 9. NEGOTIATION CHECK-UP
      Good negotiators can always reach agreement with the other party. T or F
      Negotiation is a game, sometimes you win and sometimes you lose. T or F
      Intimidation can be an excellent negotiation technique. T or F
      If you leave the negotiation with a different solution than what you had anticipated, you have failed. T or F
      Giving up something you want in a negotiation is a sign of weakness. T or F
      It is better not to know too much about the other party, that way you wont get caught up with their problems or issues or needs at the expense of your own. T or F
    • 10. NEGOTIATIONS
      Goal: to reach a “win-win” position
      Understand your group
      Identify your priorities
      Must list
      Want list
      Know the priorities of your sponsors
      Styles – understanding stylistic differences based on gender, culture, perspective enables you to be a better negotiator.
    • 11. CONTRACTS/AGREEMENTS/PROPOSALS
      Everything should be in writing
      No assumptions
      Get decision-maker or authorized signature
      Clarify liability
      Contracts/agreements written from vendor perspective
      Review contractual terms
    • 12. NEGOTIATIONS
      Remember. . .
      Present and maintain a professional attitude
      Control stress and tension
      Avoid politics and egos
      Take time to gather facts and requirements ahead of time
      Know the Dos and Donts
      Meet with people with authority to make decisions
      Never accept a NO from someone without the power to say YES!
    • 13. REGISTRATION
      The first impression
      Advanced registration vs. on-site registration
      In-house system
      Preliminary planning and marketing
      Registration forms (KISS)
      Registration Lists
      Staffing
    • 14. BUILDING THE COMPLETE MEETING PLAN
      Program Timeline
      Program logistics grid/specifications guide
      General session show flow
    • 15. SPECIFICATIONS GUIDE
      Events Specification Guide (ESG)
      AKA =: staging guide, meeting bible, spec guide
      Concise document of how the meeting will proceed
      Details the daily activities day, time, room, set-up, and requirements
      Includes comp room assignments and who is authorized to sign what
      Is comprised of a number of function sheets and/or event orders
    • 16. SPECIFICATIONS GUIDE
      General overview: group name, days and dates, contract details, info about the organization
      Meeting requirements by day, time, and place: floor plans, room set-up, signage, food, person in charge, AV etc.
      List of contractors/suppliers, meeting staff, VIPs, hotel staff: names, numbers, function
    • 17. PROJECT NEXT STEPS AND HOMEWORK
      Begin working on your specifications guide
      Watch video"Ten Tips for Negotiating Hotel Contracts - SparkPlug Ep.201" : http://www.youtube.com/watch?v=TWLps4w6pdY 
      read: http://www.sparksight.com/pdfs/TenTipsforNegotiatingContracts.pdf and chapter 40 "Negotiating Strategically: building relationships and striving to do better than win-win"
      Find and review an article that shares ideas for saving money for the client without compromising impact. Post ideas and references in this week's discussion board.