Hotel contract negotiations: Sales managers live by them, and meeting planners use them to secure bottom-line budgets on venue spaces. But despite best efforts, many planners fail to see their anticipated results on the final draft of the contract. Why?
Well, according Brad Langley, vice president of channel and partner management at Aventri and featured speaker at Northstar's upcoming SMU International, "It's because most planners aren't trained as negotiators, yet they are facing off against hotel sales veterans with years and years of experience."
Langley believes that traditional negotiation methods are fundamentally flawed. There's a new generation of meeting planners out there, and he says they don't know how to effectively negotiate hotel contracts because they've been defaulting back to old, outdated tactics.
To get planners up to speed with new best practices, Brad Langley outlines the pitfalls of four conventional methods, and follows them up with new approaches to hotel negotiation strategies.
1. Don't Rely on Traditional Negotiation Methods
Millennials rank technology use as the most defining characteristic of their generation. And with 77 million strong throughout the United States, Millennials are transforming the workplace with new digital innovations and more efficient forms of communication.
Messengers and task managers are streamlining work flows and enabling speedy information exchange on vital issues. So, when it comes to something as crucial as hotel contract negotiations, why limit communication to old-fashioned methods that rely primarily on emails and phone calls?
What's the Fix?
Venue sourcing programs are evolving to meet the needs of younger professionals. New tools add speed, transparency and enhanced documentation to communications. They simplify negotiations for planners across generations and expedite the process of getting meetings booked.
The fix here is to update and streamline processes using the latest tech. Sure, it might take some time getting used to, but the advances will surely prove to be worth the investment.
2. Don't Bog Down on Decision Making
Acquiring bids takes longer when handled by email alone, simply because many people put off replying. Plus, mission-critical messages have the tendency of getting lost -- mixed in with marketing promotions and other emails.
What's the Fix?
Strategic sourcing tools facilitate communications for fast responses. Take Aventri's comparative bid summary, for example. This tool automatically calculates cost savings and reformats bids in a dashboard with side-by-side comparisons.
To create short lists, meeting buyers choose the hotels they like and connect with the venues directly through a rebid button. The sales manager on the other side of the spectrum makes his or her revisions through the tool, which updates automatically. The technology simplifies bidding for suppliers and saves buyers from hours of work compiling comparisons on a spreadsheet.
3. Avoid RFP Spam
The event space RFP receives widespread criticism as a slow tool with a low response rate. This problem results from "RFP spam." The tech makes it so easy to send RFPs that buyers might be tempted to include 50 or more hotels on each RFP. Venues, in turn, often conclude that they have little chance of getting the business, so they take their time, eventually submitting incomplete bids or never responding at all.
What's the Fix?
Let hotels see all venues copied on the RFP and, later, all those on your short list. It's important for planning teams to qualify hotels upfront and limit each RFP to three to eight venues.
This sets up a competitive bid environment while letting sales managers in on the fact that they have a real shot at winning your business. The result? Increased response rates. Hotels act fast and send complete proposals the first time around.
4. Stop Scrolling Through Email Threads
With occupancy at record highs and availability low, it's tougher than ever to manage the cluster of communications surrounding every bid. Important concessions get lost and scattered across emails.
What's the Fix?
The best negotiation trackers capture and store the entire bid history of each venue in one place. These dashboard-driven solutions give meeting buyers more control by placing all the information they need for negotiations at their fingertips. Teams can easily compare bids by venue and view data on booked room nights by brand to leverage spend.
What about more complex negotiations beyond rates and concessions? Creating companywide concessions and contract clauses is a best strategic practice. Require venues to agree to them before submitting bids. That eliminates often-difficult back-and-forth discussions on topics like group attrition and F&B minimum guarantees.
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Brad Langley is vice president, channel and partner management clients at Aventri, where he brings a 30-year track record of exceeding business goals at world-leading incentive and travel companies. Earlier in his career, he led sales and operations at Maritz Travel Co., Eastern and Western U.S. regions. Later, he served as president and chief operating officer at Creative Group Inc., which was honored with the Deloitte & Touche Innovative People Programs Award as Wisconsin’s No. 1 privately held company for employee programs and accomplishments in innovation and globalization.
From March 24-26, Northstar Meeting Group's SMU International will be taking place in New York City. This unique affair serves as the premier global destination event where planners and suppliers will join together for meetings, networking and expert education. Industry peers will have the chance to engage in a relaxed business environment to discover new international venues and enjoy targeted industry education.
Leading up to the event, Northstar is highlighting the expertise of our SMU presenters. Brad Langley will participate in agenda items such as an expert panel discussion regarding perspectives on the global meetings industry. For more information on this can't-miss event, click here.