We may see housing as a challenge or as an opportunity. Good hotel management is teamwork where the qualified action of a few parties is needed for the success of all the actors. The organizer needs to know the event and sell its value with the RFP, proposing solutions and offering the role of consultant and problem solver. The responsibility of the hotel is to read the RFP and reply with a fair win/win approach. The client? He is our reason of being, no matter if you are hotel or organizer!
No matter the event’s market or area of interest, its size, destination, or season, agreements with hotels will have a great influence on the event’s level of satisfaction and success. PCOs always state that “having selected the venue, it is essential that the hotel accommodation is swiftly secured.”
Let’s break down what the most important aspects are when arranging hotels at conferences. Do we regard booking hotels as an opportunity or a challenge to face?
The Briefing
the RFP (Request for Proposal) is the first key to success. As a general rule the hotel briefing will include:
- Dates IN and OUT
- Average number of hotel rooms per night
- Services (food & beverage and meeting spaces)
- Budget
- Limits in hotel selection (rating, logistics, etc.)
- Registration/booking policy
- Payment conditions
- Cancellation policy
- Brief description of client/event
- Other details (complimentary rooms, upgrading, etc.)
The Hotel Offer & Contract
The agreement with a hotel is often comprised by two documents:
- The first is a detailed offering of the services in detail with costs;
- The second is a document showing the “general conditions” of the hotel. These items are conceived by hotels in provide maximum protection and freedom for the hotel. Invest time to carefully read all the aspects of the contract.
The “General Conditions”, written in a very dense and legal way, with many clauses that may contradict the offer. Ask for revisions. If you sign with no amendments it will be up to the hotel to interpret the clauses as they see fit.
Cancellation Terms
A hotel contract must grant the possibility to reduce the engagements. An Act of God (force majeure) clause may be important nowadays.
Also keep in mind:
- Split the guarantee of number of rooms’ confirmation of the event from the confirmation of number of people at every service. Each service should have an independent confirmation.
- Agree that the minimum number of people for each meal is provided some 10 days before the event. Agree that the +10% of meals must be ready with short/no advance notice in case of extra last minute guests.
Agree to hotel room attrition penalties and keep it separate from cancellation (the possibility to cancel all of the engagement).
Payment Terms
As a general rule we recommend:
- A first deposit of 5%-10% at contract signing is a fair request to guarantee the agreement. If the PCO is confirming an event years before the date such an early token deposit can be postponed to -12/-6 months before the conference or by January of the congress year.
- A second token deposit -6 months with similar percentage (i.e. up to 20% total) is acceptable as well.
- A third token deposit – 3 months with higher percentage (i.e. up to 50% total) will follow.
- A last token deposit – 1 month up to 85/90% of estimated total is suitable. Being commissions some 10/15% of an average contract it is not reasonable to exceed 85/90% of total deposits
Quantities And Costs
The quantity of rooms assigned to you will depend on many factors, too often out of your control.
- Asking for an average 70% of the hotel portfolio is suitable.
- The protection of your rate is as important as the quantity or rooms given to you.
– How will the hotel sell the rooms left available?
– At what rate?
– Can I protect my role as an organizer? - Agree to those terms in the contract.
City-wide Booking
A city-wide booking is an event where the demand for rooms will exhaust the availability of one hotel at the destination. Hotels of a single destination are competitors but are used to working together where necessary. They are allies when they need to win against another destinations but competitors once the business is assigned to their city. The support of Convention Bureaus and Hotel Associations may be an excellent means for city-wide bookings.
As their client you will save time, get better and faster quotations, contract conditions valid for all the hotels and negotiate with the entire city all at once.
One Hotel Event
It is always a risk to manage housing where the need for rooms is not enough to exhaust availability in one place. The hotel next door will threaten your hotel sales. The key to success in such a situation is “pain-chain”. If you know that no offer is good enough to sell just do not buy and sign a BAR (best available rate) contract. When hotels feel empty they will reduce costs. It is the best scenario for the customers. A BAR contract allows you to sell at the best rate of the moment.
Package Convention
What if at your next event you decide on hotel assignments for participants? That’s the best because you have total control. So go ahead and exploit the situation, by granting that no flexibility will be required, you can ask for cut-rate prices. If you can offer the hotel a group where all the requested rooms will be used and nothing will be canceled (i.e. no adjustments for flexibility or attrition are needed by you) your business has great appeal to any hotel.
As a result, you can obtain special reduction of costs in comparison with the normal group with flexible terms. Flexibility is a luxury in contracts. If you give away your right to flexibility the hotel must compensate you with reduced costs. It is a standard rule of any market. Think about how most sales are handled at a shopping center: sales = super saving but no returns.
Easylink technologies may help you here: Easylink is the generation of online tools owned by the hotel where an event obtains a dedicated online page managed by the hotel. Participants prefer booking online at an official hotel link and obtain benefits for being loyal direct customers (loyalty points, upgrading, etc.).
Meeting Only
Just as there are events seeking only rooms in a hotel, there are events where rooms for sleeping are not necessary. It is not a negative fact that you need to hide.
The hotel may greatly appreciate your event since the rooms may be booked for another event on that date!
Final Remarks
We may see housing as a challenge or as an opportunity. Good hotel management is teamwork where the qualified action of a few parties is needed for the success of all the actors. The organizer needs to know the event and sell its value with the RFP, proposing solutions and offering the role of consultant and problem solver. The responsibility of the hotel is to read the RFP and reply with a fair win/win approach.
The client? He is our reason of being, no matter if you are hotel or organizer!
Daniele Picollo
Manager Accommodation Division, AIM Group International
Daniele Picollo has led the Accommodation Division of AIM Group for 15 years. He’s well known in the hotel industry, intermediaries and medical associations as one of the most trustworthy consultants in the market. He is an expert in resolving accommodation related challenges and heads hotel reservation and hotel management teams for major events. Often invited by a number of international hotel chains as a “voice of the market” speaker, he leads sessions about market changes with a vision focused primarily on Europe and Mediterranean countries.
