by Katie MuckHotel Contracts: What’s Trending

Be ready to negotiate ancillary fees, tech support and meeting room usage By Katie Muck

In the ongoing seller’s market, getting to the point of requesting a contract can be half the struggle for meeting planners. As planners, we need to present an RFP that will leverage the value of the meeting to hoteliers throughout the RFP and contracting processes. In addition, we must be prepared with negotiation strategies that help us secure an agreement that provides mutual value, shares risk, and meets the needs and demands of our stakeholders. While each and every contract clause is important, current industry trends demonstrate an increased need to focus negotiating skills on three areas in particular: ancillary fees, tech support and the usage of specific meeting rooms.

It is a good idea to inquire about other business the hotel has already confirmed before or after your event to see if any [technology] costs can be shared with another group.

One major trend that we are seeing in the marketplace is the rise in ancillary hotel fees. There are several different types of service fees, surcharges, etc., that hotels are incorporating into their contracts. Besides being aware of them, it is important to include language that will not allow the hotel to add on fees beyond what is disclosed in the agreement. Note that these fees are negotiable, and ultimately it is the responsibility of the planner to request that the additional cost centers be reduced or eliminated if possible. Demonstrating the overall value of your meeting to the hotel makes it more likely to achieve this cost reduction. Another key consideration in contracting is the cost of technology support for meetings. Because of the inconsistency of tech support fees, this line item can cause a meeting to quickly go over budget. While technology is complicated, all of the costs need to be discussed, evaluated and ultimately negotiated. These include hardware, set up/ tear down, Internet, and bandwidth fees, among others. Pricing should always be documented as part of the AV agreement. In addition, it’s a good idea to inquire about other business the hotel has already confirmed before or after your event to see if any of these costs can be shared with another group, assuming that group will be using the same meeting rooms and has similar tech requirements. This cost sharing can be easily accomplished when using the in-house provider and may be a bit trickier when partnering with an outside tech company, but can be done.

Hoteliers are also asking more frequently when contracting to have the ability to move the meeting space around in their hotel, which enables them to maximize their function space and potentially book more meetings. Accordingly, the contract will only guarantee a certain amount of function space, but not specific meeting rooms. This can affect the ROI of the event and even prove disastrous for a meeting. For example, if a hotel guarantees you will have a minimum of 1,200 sq. ft. for your meeting, that could be in any room that is at least 1,200 sq. ft. Keep in mind that certain setups will not fit into all meeting rooms of a certain size successfully. Thus, it is important in the contract to address function space by name, guaranteeing the space for 24 hours if necessary, and stipulate that the function space may not be changed unless it is agreed to by both parties. Again, as the planner, be prepared to present your meeting history, including information on past function space usage, to support you when negotiating this aspect of the contract.

Meetings are major investments, and planners need to clearly understand and be aware of all components of the hotel contract. With the rising expectation for each meeting to deliver a robust ROI, being strategic and knowledgeable at the contractual phase has never been more important.

Katie Muck is Senior Director, Global Meeting Services at Meeting Sites Resource. She is responsible for strategically partnering with customers on all facets of global site research, custom hotel contract negotiations and meeting support services. Muck’s 16-year hospitality career began in operations with Hyatt Hotels World Wide. She then transitioned to a sales and customer service role at the Hyatt National Sales Office, becoming a multiyear recipient of the Hyatt Masters Sales and Outstanding Production Achievement Awards. Muck also served as President of the MPI Heartland Chapter from 2015-2016.