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How to Negotiate Hotel Contracts for Your Own Event

02nd October 2009
By Arvee Robinson in Business Law
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Many factors come into play when renting a space for your event. For now, we are going to focus on hotel contracts, because hotels are still the most popular and profitable place to host an event.

When renting a space at a hotel, you will first speak to the Director of Sales for that hotel. The Director of Sales will personally meet with you. Take advantage of the fact that this person will treat you to lunch if you meet at lunchtime. This gives you an opportunity to sample the food in case you want to add food to your event.

When you meet with the Director of Sales, you will have several points to negotiate, such as the price of the meeting room, banquet costs, and booking hotel rooms.

Meeting Space

The size of your audience will determine the size of the room required. The average hotel meeting room ranges from $200 to $1,000 per day. Ballrooms that hold hundreds of people range from $1,500 to $5,000 per day. There are three ways to reduce the price of the meeting room or even get it for free.

1. Food.

If you guarantee a certain amount of banquet costs at your event—in other words, if you add food (breakfast, lunch, snacks, and dinner), you can lower the price of the room or possibly get it for free. The problem with this is if you do not make the promised dollar amount in banquet costs, you have to make up the difference, and this could be quite costly.

2. Guest sleeping rooms.

Another way to reduce the meeting room rate is to book a block of rooms. This technique works great if you are promoting a large event in which people will be traveling from out of town and need to stay in a hotel. The problem with this method is that your hotel block is usually set by the Director of Sales and can be quite high. The second challenge is the deadline. Normally, a deadline for people to use the hotel block is two or three weeks before the event. Most people procrastinate and book their hotel room at the very last minute, which could cause you to miss your numbers. In turn, you have to pay for the rooms not used. This is a real gamble. As a result, some promoters have gone as far as giving hotel rooms away for free as an incentive for people to attend their events.

3. Meeting room.

If you don’t want to gamble on the food or hotel rooms, you can always negotiate the price of using the meeting room directly. If the room alone is $250, ask for a break of $200. If the room is $2,000 or more and you are inviting hundreds of people to that hotel, negotiate a lower meeting room rate. For example, in the contract you could state that if you book a certain number of rooms, the rate becomes $1,500 per day.

When working with the Director of Sales, remember this person’s job is to book meeting and hotel rooms and bring in banquet services. He or she has the power to get you what you want. Other bargaining chips could be free afternoon cookies and coffee, free room supplies, such as flipcharts, or even extended check-in/check-out times.
Hidden Money

Ever wonder why Event Planners insist on negotiating the hotel contracts for you? Because, there is hidden money in it. It’s called points. Each hotel chain has a system for tracking points. It’s similar to frequent flyer’s mileage. Even though it’s your event, your event planner takes the points! Now you know, and you can sign up to receive the points even if you use an Event Planner. Ask your Director of Sales to sign you up.

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