Leverage is defined by dictionary.com as the “power or ability to act or to influence people, events, decision, etc., to obtain the desired result.
Synonyms for leverage include “advantage”, “weight” and “clout”. I think we can all agree, it’s a nice thing to have, especially if you have the responsibility of ensuring your client (internal or external), gets the best deal for their meeting from hotels and meeting venues. The question is, how do you go about making sure you enter the hotel negotiations with the greatest amount of leverage? I hope to help you with a few answers.
There are many articles available to help you with the actual negotiation process, including “Negotiating Hotel Contracts”, which recently appeared in ASAE’s Association Now. One of the key points, Joan Eisenstodt points out in this article, is that negotiations begin with the RFP. And it is at this beginning, where I’d like to emphasize how important it is for meeting professionals to understand where the leverage points are and aren’t…in other words, under what conditions will the meeting be most desirable by hotels and venues? This inquiry should begin prior to the distribution of your RFP and requires a little research and tracking. Right about now, many of our veteran professionals are saying it’s a no-brainer to have complete post-event reports, however, I and my colleagues on the supply-side are consistently surprised by how little, even the veteran professionals know about the value of their meeting and have this documented in the RFP.
I have come up with five factors which I believe are most impactful on the desirability of your meeting or negotiation leverage. I’d like to know if you think there are others.
- Meeting Rooms to Guest Room Ratio
- History of Guest Room Pick-up
- Time of Year
- Arrival and Departure Patterns
- Total Revenue
In a recent survey, with PCMA’s Convene magazine, I asked this question of planners, “In terms of how hotels value your meeting, which of the following do you think is the most important to them?” Over 44% felt total revenue for the hotel was most important to the hotel. Is it as simple as that? Now, my father always taught me to be helpful to others by rephrasing what they meant to say…in other words, 44% of the respondents felt total revenue is one of several factors hotels evaluate but quite frankly it depends. It depends if the meeting takes up all the meeting space compared to the number of guest rooms. It depends if the requested number of guest rooms has a track record or if this is a first time meeting. It depends if you’re considering a downtown destination during a time of year when transient demand is at an all time high, or a resort destination during off-peak times. It depends if your meeting arrives on a Tuesday versus Sunday and prevents other meetings from occurring before and after your meeting. I recently had a conversation with one hotel general manager who underscored that arrival and departure patterns is one of the most important factors they evaluate….even though our planners perceive it to be one of least important at 1%.
So the best way to understand your negotiation leverage or how desirable your meeting will be to hotels is to flat out ask. I’ll be asking a lot of these questions during our upcoming 30 minute webinar on Wednesday, September 26th with Graeme Hughes, Director of Convention Sales, Metro Tucson County Convention & Visitors Bureau. I hope you will register and join in on the discussion.