September 2015
Our Family of Companies


 
A Letter from our Chairman:

One of the most important factors in developing a successful meeting or event is preparing and executing a contract that will maximize benefits and limit exposures for your organization. You don't need to be a guest on Shark Tank to know it takes a considerable amount of skill and experience to negotiate. From securing a favorable attrition rate, to expanding options for your F&B choices, A/V setup or entertainment, the process can be long and daunting. 
 
In this month's HRG newsletter, we examine some of the issues to consider when negotiating with event venues, and share some proven tips and techniques we have found to be effective as you plan that  memorable meeting or event. 
 
As always, we invite you to Follow us on our  HRG LinkedIn Group page. In case you missed them, we have posted this and all past editions of our monthly HRG eblasts, and our Spring/Summer Newsletter, on our website at HRG In the News.

Wishing you continued success this fall!

All the best,



Robert O. Sanders, Jr., CMP
Founder and Chairman
Hospitality Resource Group, Inc.

Venue Negotiations and Planning - 
How To Create a Winning Proposition  

Meetings and Events planners are constantly engaged in putting all of the pieces together to pull off yet another spectacular event. But like a giant Jenga game, if you are not careful and deliberate in your approach, your hard work can break apart and set you back. 

Many consider the most important and challenging consideration in event planning is to select a venue. This often involves a long and arduous process of negotiating the best deal possible for your firm. Right from the start, there is a long list of considerations and options to consider in engaging a venue. 

First, it is imperative to approach your venue contact and let them know you view them as a partner in your success; make sure they understand from the outset they have a stake in the event. 

Next, make sure you are on top of current market trends, so you can negotiate from a knowledgeable position. Over the past year, hotel occupancy rates have increased, and the average daily rate as of August was up 4.6%. At the same time, according to data from STR, Inc., there is more competition based on new hotel construction over the past 5 years. For example, a building boom in NYC has added 30,000 new rooms in the past seven years, and it's on track to reach an all-time high by 2016.  A similar pattern can be seen in the suburbs. As a result, room rates are expected to slowly increase, and then level off, leaving other items to negotiate. 
Negotiation Strategies: Know Your Situation and Options

There are a number of issues to consider when planning an event, and you need to be well-versed and prepared before you start. Throughout the process of negotiation, never forget the fact that everything is on the table. Before you begin, make sure you have your own house in order and consider the following: 
  • Develop a comprehensive estimate of your budget: include headcount, travel, consultants, venue costs- all the "usual suspects." 
  • Consider several event dates--based on solid research of competing events and internal company timing issues--to help prepare to make decisions quickly.
  • Determine your space requirements (occupancy, accessibility, electrical, A/V, etc.) and estimate your total headcount. Be as realistic as possible and go in with a high-end estimate.
  • Clarify what you and your staff can and can't do. Many venues have contracts with third-party companies or unions to carry out certain duties (e.g. carrying luggage, building stages or displays, and setting up meeting rooms). Know up front what you would pay extra for on the venue's side and, if possible, position your staff to take responsibilities that may lower your costs.
Deal from Strength

Now that you are in a position to bargain, here are our top 10 key points to consider while negotiating with your short list of venues:
  1. Manage Expectations - Request deadlines for proposals, a window for responding, and a date for signing a contract. Negotiate on "drop dead" dates, and press for flexibility from the venue; review cancellation and attrition developments, and consider their impact on each contract.
  2. Gather Quotes from Multiple Venues - Compare costs to maximize discounts, maintain flexible terms, and consider long-term impact on both sides of the negotiating table.
  3. Leverage F&B Spend - The second-highest profit center for most hotels is their food and beverage revenue, and a larger spend in this area can help you negotiate on other expenses. Many try to include a minimum F&B spend in their contracts, so be realistic about your number of anticipated attendees, and push back the deadline for being able to change the attendee head count and F&B minimum as far as possible.
  4. Negotiate For Free Space - Venues often consider offering complimentary space if you meet your minimum spends for F&B and guest rooms. If you aren't booking rooms (or if your venue is a meeting/convention center or reception hall), negotiate a discounted event room rate, if possible.
  5. Maximize Comped Room Ratio - The standard ratio here is one comped guest room for every 50 rooms booked. Try to push for a better ratio; one for every 30 is a good start. Negotiate all minimum requirements and cutoff dates. As standard attrition rates start at 10%-15%, try to negotiate to 25%.
  6. A/V and Communications - This is the highest profit center today for most venues, so you are in a great position to negotiate rentals. If possible, inquire if you can contract with a third-party A/V provider. Additionally, as Wi-Fi is now in such high demand, and most hotels offer it free to guests, make sure they don't charge for this, and reference the total event spend to negotiate.
  7. Parking and Transportation - Assuming this is applicable to a large number of your attendees, request free or lower-fee parking. For out-of-town travelers, ask about other transportation options including vans, limos, buses, and venue-owned vehicles.
  8. Newly Built/Renovated Venue Options - These locations may be more willing to negotiate to attract you to contract with them at a lower cost. As they look to expand their client base, they may be willing to invest in a possible long-term relationship. For new properties, make sure to include out clauses for performance issues.
  9. Review All Contract Details - Make sure every item is listed in your contract and, if possible, plan to sign the contract at the end of the month or quarter, as venue management looks to meet their revenue goals. Property managers may be open to your request for a price break if you sign before the end of a month.
  10. Never Sign a Contract Until You Have Read Every Word - As you will be the one held accountable by your management, have at least one colleague review everything- including the fine print.
The Value of a Strategic Event Management Partnership

M&E planners are continuously challenged to exceed expectations and deliver- on time and under budget. As they deal with the pressures to improve ROI and manage costs, negotiations become a crucial point in determining their level of success. 

A strategic M&E management partner can become an invaluable asset to M&E planners, as they provide experience and resources to help position with a venue short list, and determine your final choice. Choosing an experienced team of M&E consultants can make a real difference, and help keep your event plans on track.


Hospitality Resource Group's Event Solutions team has been a leader in planning, developing, producing and managing high profile events for the past 18 years, in partnership with major corporations, not-for-profit organizations, and healthcare leaders.

Do you need help developing an event plan to maximize your return on investment? Contact one of our experienced event management planners at HRG Event Solutions at (914) 761-7111 or email walter@hrginc.net.
About Hospitality Resource Group

Hospitality Resource Group, Inc. (HRG) is a group of three vertically integrated companies, with over 18 years of experience in developing innovative marketing, training and event programs for businesses, education institutions, municipalities and not for profit organizations. HRG clients benefit from our proven ability to 
ignite market interest, engage consumers, and educate employees on how to manage and lead their companies to build brand equity, increase sales and improve productivity.

The HRG family of companies includes:

HRG has earned widespread recognition from leading industry organizations, including:






Corporate Office: 237 Mamaroneck Avenue, White Plains, NY - Phone: 914.761.7111 - Fax: 914.761.7854 - info@HRGinc.net
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