When it comes to negotiating successful contracts for meetings and events, Therese Jardine, CEO of Strategic Event Procurement in Seattle, has an analogy: “Sending someone who does not have industry experience to negotiate a hotel contract is like sending a 16-year-old who just got their driver’s license to the car lot to buy their first car themselves. What you don’t know, you don’t know.”
And there is oh-so-much to know. Sure, dates, rates, and space are obvious. But details such as the wording of attrition policies for unfilled rooms also can make a huge difference. Which concessions are the property willing to make? What happens if the client ends up needing to cancel or if the property opts to back out in favor of a more lucrative booking? What if an unexpected disruptive event makes it impossible to meet? What if the property does not keep up with maintenance or is unexpectedly under construction? Or, if it is new, what if the property is not ready to go when your dates roll around?
And those just scratch the surface of the multiple issues that can arise long after the ink is dry. While a contract might not address every possibility, it helps avoid surprises—for all involved.
Nicole Gore, global director of the Americas for Hyatt Hotels Corp. and based in Dallas, works with third parties to book events at Hyatt properties around the world. “For me, a successful contract is really about communication and trans-parency,” she says. That means working from a request for proposal with accurate and detailed information, including client needs, expectations, and budget.
Michael Ferreira, owner and founder of Detroit’s Meetings Made Easy, specializes in hotel sourcing and contract negotiation, among other services. He says the request for proposal sets the tone. “My goal is to make sure a request for proposal looks as detailed as possible, so a salesperson can quickly determine whether they are able to bid on it or not,” he says.
In her leadership role, Jardine works with corporate and other meeting and event organizers to develop strategies for successful gatherings. She provides guidance on contracts as well. Additionally, she teaches a contract-negotiation course for Meeting Planners International and offers a catalog of key clauses for clients. For example, when it comes to calculating attrition, Jardine says using cumulative room nights is the gold standard as opposed to nightly room counts. “It protects against unexpected stay patterns while still recognizing overall revenue for the hotel,” she says. She also notes planners need to pick their battles. “If your meeting is not at risk for attrition, put your energy in another clause or concession that you do want,” she advises.
Most event contracts favor the party that created them and tend to originate with the property, says Joshua Grimes, a Philadelphia-based attorney who specializes in meetings and events. “It’s the responsibility of the planner to recognize clauses that cause issues and propose alternatives or revisions that are more favorable to the planner if not more equitable to both sides,” Grimes says. Besides attrition, those might include clauses relating to cost increases, room rates, and service charges. Staffing and service expectations should be addressed from the get-go. So should security and who is responsible for it, Grimes notes, citing the example of keynote speakers who could be targets of protests.
He also advises examining the wording of force majeure provisions. “Traditionally, force majeure allowed cancelation by either party if it became ‘impossible, illegal, or commercially impracticable’ to have a meeting,” Grimes says. “Since [the start of] the COVID-19 pandemic, the words ‘commercially impracticable’ have been eliminated by venues, which means the meeting would have to go forward unless it’s illegal or impossible.” But those words should be included, he says—without them, planners risk being unable to cancel due to uncontrollable events such as natural disasters, government restrictions, or supply chain disruptions.
The way in which a property’s policies are spelled out is a detail that should not be overlooked. Jardine strongly suggests when contracts include hyperlinks to online policies, those sections should be printed out and attached as part of the signed contract, because electronic language can be changed after the fact. In addition, Gore notes planners can save money with multiyear commitments.
Besides hotel contracts, others might be negotiated for convention centers, catering, transportation, production/creative, entertainment, event management, destination management, and off-site venues. John Paladino of Milestone Meetings in Scottsdale, Arizona, says Cvent’s event platform is a fantastic tool. It streamlines the process of managing venue selections, negotiating contracts, and covering logistics, and makes it easy to send out a request for proposal to multiple venues. Still, Paladino says nothing replaces a healthy conversation to tee up communication with vendors
of particular interest.
It is always a good idea to have a contract reviewed by an attorney or experts like meeting brokers and procurement professionals before finalizing. For those with limited time or resources, artificial intelligence also is a helpful tool to analyze and summarize contract language, but Jardine says it should be used with a cautious and discerning approach, as it is not always 100% accurate.
And lastly, planners should remember they can always walk away if coming to an agreement is just not working. “Too many groups have already settled on a particular property, and they communicate to the property that they’re not looking anywhere else,” Grimes says. “So that really creates very little incentive for the property to negotiate.” He says in today’s environment where there is often pressure to decide quickly, sometimes moving on is a planner’s best bet.
cvent.com
hyatt.com
meetingsme.com
milestonemeetings.com
mpi.org
strategiceventprocurement.com
