CMP Series: How to Negotiate Better With Hotels

Author: Ellen Ryan       

This past spring, the American Physiological Society (APS) was negotiating with an independent Virginia resort over meeting space for June 2019. Their package included all meals, complimentary parking and Wi-Fi, and every inch of conference space. And then came the room rate: $350. Screeech. “That was way out of our price range,” said Linda Allen, director of meetings at APS. Despite the fact that the amenities and location were appealing, and the parties had agreed on F&B and conference room costs, she said, “we had to say forget it.” Shortly after, the resort called back: Did APS have flexibility in timing? The society’s RFPs had a clause noting that dates were preferred but flexible, so Allen asked, “What have you got?”

Linda Allen

The resort salesperson and Allen looked at their calendars. Instead of hosting the event the first Sunday through Tuesday, the salesperson suggested, how about the third Thursday through Saturday, when the resort had a hole to fill? APS could make that timing work — at a room rate of $150.

“They wanted a resort fee of $10 for a total of $160,” Allen says. “We didn’t give a whole lot of pushback at that point.” Since then, when APS staff members are talking with hotel salespeople, they make it a point to emphasize their flexibility, asking: Can we move to a better date for a better price? Does your schedule have a hole to fill? A success story is nice to hear during this seller’s market, when negotiation with hotel chains and other conference and meeting venues is often tougher than ever. What else is making things difficult?

Factors to Consider

Venues are requiring longer lead times as booking windows shrink. Corporations are booking further out, too. Hotel mergers, led by Marriott, are consolidating properties, leading to higher prices, steeper F&B minimums, and less ability to play venues o one another. Where some associations used to include three cities in a bid, now they include five because some just won’t agree to terms. Outside parties hired to book venues, some planners told Convene, sometimes wrangle worse instead of better deals.

Contracts have escalator clauses of 3 to 5 percent and insist on confirmation a year ahead. Associations make clear that they need rebates or lower rates, discounted conference Wi-Fi, or specific dates — no exceptions — but many facilities just will not play ball. And even after a planner explains that a price point or date range absolutely won’t work, some salespeople keep pressing the issue with new RFPs.

“It’s a waste of time for both sides to continue if we’re not going to get anywhere,” said Colleen Bagnasco, CAE, CMP, the Society of Actuaries’ (SOA) senior director, events. “Hotels just don’t seem to care,” Allen said. “I guess they don’t have to care.” But caring about negotiating a fair deal is not an option for business event organizers. We asked professional negotiators and planners with a history of successful negotiations to share their insights with Convene.

You’re Not Going Into Battle

Margaret Ann Neale

Margaret Ann Neale, Adams distinguished professor of management at the Stanford Graduate School of Business, emphasizes the importance of entering negotiations with the right mindset. Our language is full of terms like “suit up” and “go into battle,” she said, but to do well, you need to set the armaments metaphors aside.

“Most people walk into a negotiation thinking, ‘I’m going to get stuff from you that you don’t want me to have and keep you from getting my stuff.’ [But] if you approach it that way, you’re already in an uphill climb,” Neale said. That creates four effects, she said:

1 A battle mentality makes you see the other party as the enemy.

2 “Even if they weren’t going to do battle, they will when they see you all armored up. They’ll reciprocate.”

You become more concerned with “winning” than with what you came to get.

4 If you look at negotiation as a battle, you’ll be fighting with the very salespeople with whom you have the potential for an ongoing relationship. That’s problematic, Neale pointed out. Because you don’t want to pick a fight with those people, you may opt not to negotiate with them — instead either capitulating or not engaging at all.

All good reasons to approach negotiation with these angles and tactics:

• Be easy to work with. This is a relationship business, as Neale emphasized — not just between associations and facilities but between planners and salespeople. Are people happy to hear from you? “The more you bring a level of expertise, loyalty, professionalism, and organization [over time], the more you bring as a client,” said Kendra Allman, director of meetings for the National Stone, Sand, and Gravel Association (NSSGA). Be communicative, be honest, at the very least give a long heads up if there’s a video crew or midnight furniture delivery on the way, she said, and you’ll probably find that future negotiations go smoothly.

•…Even if they’re not. You never know when you’re encountering someone having an o day, said Josh Britton, meetings coordinator at the American Association for Cancer Research (AACR). With a difficult salesperson, he says, just be pleasant, focus on business, and “treat every day as a new chance to make a first impression.”

Lisa Gates

• Be open about your budget and wants. “‘We have X dollars and want Y. How can you accommodate us; how can we work together?’ Then let them go away and noodle on it.” That’s how Lisa Gates, co-founder of the negotiation, coaching, and leadership firm She Negotiates, advised approaching terms with salespeople. After that, the no’s, the budget figures, the bottom lines are not your stopping points; they’re your starting points. Salespeople will respond in kind, she said. “Even in a good market, they don’t want to lose business,” Gates said. Especially if you’re nice, easy to work with, and even “a little ingratiating” — if this property has the best food or the most suitable display space, tell them you’ve noticed.

Bagnasco shares a few years of SOA’s room rates and F&B spend every time she speaks with a new venue, and gets a very positive reaction: “Hotels say, ‘This is fantastic. We really want this piece of business,’” she said. They “love having something to work with. You start o in a better position by sharing information about your history, your meeting, your attendees. I firmly believe in being open and being ethical. Why hold it close to the vest? Maybe there’s not as many rounds of negotiation needed if you share upfront.” And, she adds, echoing Neale’s four points about avoiding a battle mentality, “if you start out withholding information, you’re putting them on the defensive.”

• Think in-house versus contracted. A hotel or facility will find it easier to give you something if the cost to itself is low, Allman said. For example, say you would find it valuable to have airport pickups for your top speakers. That could be a simple get if the hotel has its own car service; not so much if the venue would have to contract for it.

Dawn Amaskane, CMP

The same goes for parking: If the hotel owns or runs parking, the group may get free passes. For staff, that “can really hit our bottom line,” said Dawn Amaskane, CMP, the American Osteopathic Association’s (AOA) director of meetings and travel. To know what’s low- or no-cost to the facility, she asks in the RFP: Who manages AV, parking, internet?

• Next, look for asymmetries to trade. Once you’ve laid out what’s important to you, ask what’s important to them. Horse-trading alert: Here’s where you match things unimportant to you with what’s very important to them and vice versa, Neale said. How do you know what is and isn’t important to the salesperson? Read the next tip.

• Do your research. It’s standard operating procedure to research the chain by checking its website, your notes on past deals and conversations, the property itself, and so on. To be most effective, Neale said, prepare for each hour of negotiation with two hours of research — including on the salesperson.

What challenges does s/he face? How does this person look good to his/her boss? Where did s/he go to school; what outside interests might you have in common? Check LinkedIn, look on social media, talk to colleagues within and outside your organization, and compare notes with your colleagues. “Research isn’t fun, but it’s critical,” Neale said. “The more you know about them, the more you can make a connection, and the more you’ll come up with ideas that will grab their attention. All things being equal, they might choose you over someone else.”

• See a kaleidoscope, not a palette. Instead of discussing one piece of your business at a time, focus on the package of moving parts, Gates advised. Continue trading things of value until each side is happy, keeping the whole in mind. If you hit a wall on one point, move on to another — maybe it’ll shift, you’ll find a tradeoff, or something else will develop.

John Buckley, director of convention operations and corporate relations, Infectious Diseases Society of America (IDSA), tells salespeople that if they lower their rate or give him some other concession, he’ll guarantee X amount of F&B. But he wants to be sure all event stakeholders are included in that amount, including exhibitors. “Their F&B has to count toward my bottom line,” he said. “And you’ve got to give me meeting space, too. And what about Wi-Fi in the meeting space?” Other considerations include parking, transportation, resort fees, and comped rooms.

• Don’t be afraid to ask. Sometimes it pays to ask for more than the standard stuff. Amaskane gives the example of talking with a salesperson for Caesars Palace in Las Vegas “about added value to help our bottom line and (creating) some excitement” for an AOA event, she said. She asked: Were there any sort of complimentary entertainment options? That’s how actors playing Caesar, Cleopatra, and their guards came to mingle with guests in the exhibit hall for two hours, posing for photos and creating a buzz. Amaskane estimated that the hotel-managed entertainment was worth $2,500 to $3,000.

• Don’t shy away from no. “We’re afraid to ask things because we’re afraid we’ll be rejected. Sometimes they’ll refuse. That’s okay,” Gates said. “Set it aside and come back to it.” Maybe you have to walk away altogether — which isn’t always the end, either, as was the case with Allen and the Virginia resort. If you agree to come back to the table, you can start fresh.

• Speak to the heart. Britton looks for ways that “we’re not spending an excessive amount of money but the hotel can still feel like it’s doing well with our business. … We go to these hotels and say, ‘we’re not trying to make money off of these meetings; the reason we’re looking for these concessions and discounts is to put more money towards our mission of curing cancer.’” In addition, AACR’s partners usually know that 88 cents of every dollar the organization raises goes directly to cancer research, he said, “and everyone has a story of how cancer affected their life. … Behind the emails and the complex formulas of room-to-space ratios, people are human.” In negotiations, the mission and the figures to back it up can help on the margins.

• Explain the situation. Suppose a property wants you to commit to terms a year ahead, and the salesperson thinks you’re being stubborn when you balk. Sometimes all it takes to change the dialogue is sharing the reasoning behind a policy. “We explain that we’re grant funded,” Allen said, “and typically don’t know our grant situation until nine months out, not 12.”

• Point out the steadiness of the sector. Association business is very consistent, AACR’s Britton noted. He and his director remind facilities that when the last recession hit, corporations retreated while their association kept up its full slate of meetings. Corporations may spend a lot, he notes, “but we are much more consistent; associations meet every year no matter what. Our track record should be a competitive advantage.”

• Negotiate at the end of the year. If this sounds like buying a car from a dealership, it is — because salespeople have quotas, and quotas have deadlines.

Recently, at November’s end, a St. Louis property both came down on the guest-room rate and threw in Wi-Fi for SOA. Another chain agreed to provide the SOA staff hot breakfast and morning and afternoon breaks in the staff office at its annual meeting — which saved the society $12,000.

And Bagnasco remembers “jumping for joy” with a colleague around 2 p.m. New Year’s Eve five years ago when the SOA executive director got leadership approval to sign o on a favorable contract and they could send it back to the hotel with hours to spare before the clock ticked over to a new year. “That’s not ideal, and I don’t want to go through that again,” she said. “But especially at year end, you are more likely to get something good.”

• Remember the economic cycle. As the saying goes, “This too shall pass.” And as our speakers agree, we’re due for another recession. Besides the usual early economic signals, they point out ever-costlier natural disasters and visa restrictions that are affecting both immigration and conference attendance.

But IDSA’s Buckley sees a bright side in the prospect of a downturn. “The economy will crash, hotels will wail,” he said, “and we’ll have a much easier time again.”

Test Time

› Earn one clock hour of certification credit by reading this story and sidebar, and reading “Seven Elements for Successful Negotiations,” from the Harvard Business Review Guide to Negotiating by Je Weiss at convn.org/HBRNegotiate.

› To earn certification clock hours, visit pcma.org/convene-cmp-series to answer questions about information contained in this CMP Series article and the additional material.

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