Conference Planning, Hotel Negotiations and Avoiding the Dreaded Penalty

by Bunnie Riedel, Host, Nonprofit Conversation

This year I’ve heard more stories about bad conference attendance, being hit with hotel or meeting space penalties and outright cancellations of conferences.  For nonprofits who count on conferences to bring in needed revenue, having a disappointing conference can not only be discouraging but can threaten the bottom line.

Nonprofits, businesses and government agencies are cutting back on travel or eliminating it altogether. A friend told me that even if he wanted to spend his own money to travel to a conference (and take vacation leave) he was discouraged from doing so because his government agency thought it would just “look bad.” I know of two regional conferences that were cancelled because of low registration due to travel bans. One of them was heavily penalized by the conference center because their contract guaranteed room rental and meal expenditures. I also know of two national organizations that received large penalties because they didn’t meet their room night obligation. In these instances, nonprofits who could little afford to pay the penalties were forced to do so because of contractual requirements.

Perhaps it is time for your organization to take a hard look at your conference tradition. While conferences and meetings can mean a lot to your organizational culture; bringing members together for networking and fun; is a conference absolutely necessary and what will it mean to your organization to skip next year’s conference? Are you afraid of disappointing members or losing momentum? Without a conference will you become less relevant? Will you lose members if you don’t host a conference? Do you count on a conference as a source of revenue? And right now, can you count on a conference as a source of revenue or will it become a liability?

Could you achieve some of the same goals without a conference? Many organizations are moving to online meetings and workshops. Others are beefing up their online resources or hosting chat boards to give members a sense of connection. I think your members will completely understand if you take a one or two year conference hiatus.

If you negotiate hotel contracts a few years in advance (which actually is my recommendation) you may not have a choice in whether you host a conference or not. Typically for medium to large conferences, the opt-out period is eighteen months prior to the conference. Which brings up a point for current negotiations, tighten the terms of the opt-out period to at least one year and attempt to negotiate penalties for a nine month and six month opt-out. It is better you pay a flat penalty if you opt-out at nine months than go forward with a conference that causes you to pay conference planners, trade show costs, advertising costs, audio-visual expenses, meal guarantees and room night penalties.

Additionally, be sure to include in the contract a clause that if the hotel advertises a lower rate to the general public than what you have negotiated, your room rate drops to that lower rate. The last thing you want is to have your room rate undercut by online booking sites such as Priceline or Orbitz. Conference attendees will want that lower rate and will book outside of your block and that could cause you to not meet your room night obligation.

As a final note, everything, absolutely everything is negotiable right now. From how much you pay for coffee to what items you will serve for dinner to how much you will pay for audio-visual set ups (usually the most expensive items for conference). The economy has taken its toll on hotels and conference centers in the same way it has affected everything else. Don’t settle for fixed menus; work with the hotels and caterers to design menus that will be appealing but less expensive. You are bringing them business they would not have otherwise, allow them to accommodate you.

Contact Bunnie Riedel at info at riedelcommunications dot com

Conference or meeting tip:  Don't buy tea, hardly anyone drinks it and you will be charged $65 to $85 just for hot water at every break set-up. 

Negotiating With Hotels: Now is a Great Time!

Amidst all the bad news of this economy, there is a silver lining for nonprofits who host conferences. Hotels have found their income off as executive travel budgets and meetings have been cut back. Now is an excellent time to negotiate with hotels to get a great room rate, concessions on meals and extra services.

I am a big fan of planning years in advance. But the timing of your conference planning will depend on how large your organization is and how many people attend your annual or bi-annual conferences. If you have over 200 people attend your conferences on a regular basis, then negotiating hotel contracts three even four years in advance can work to your advantage. You can lock in rates now for a conference three years from now, so even if hotel business picks up, you can get bargain basement rates for the future at this year’s prices.

If you’re unsure how the economy will affect conference attendance, do a members’ survey. Are your members’ travel budgets being reduced or eliminated? What is the likelihood they will attend your conference in 2010 or 2011? It’s important to get a sense of what your members’ circumstances are so that you don’t overbook room nights and get stuck with a penalty.

The first stop to negotiation success is to work closely with the convention and visitors bureau. What have they heard about hotels in their city? The CVB’s can do the initial shopping and save you loads of time. Send them your conference needs, attendance records and agenda and let them pick out the hotels that fit your requirements. How many breakout rooms do you need? How large should the general meeting or banquet space be? Do you have to have a hotel that is unionized? Do you need space for a trade show? CVB’s can also give you a schedule of special events happening during the dates of your conference and ideas for how you can leverage them for your members.

Speaking of dates for your conference, if you have some flexibility you will save lots of money for yourself and your members. Weather, time of year, and location can all drive room prices up and certainly can drive airline prices through the roof. For instance, Washington, D.C. is very busy in the spring and summer with tourists and special events. Tampa is very busy in the winter but fairly quiet in the summer. A late October conference in D.C. or a mid-summer conference in Tampa, will allow you to negotiate excellent room rates. (Yes, I know it’s hot in Tampa in July but nearly every hotel in Tampa has a huge swimming pool and face it, most people attending conferences spend most of their time in the hotel anyway).

Don’t be afraid to “play” hotels off one another. If one hotel offers you lower room rates, go back to the others and ask them to beat the price. It also helps if you do a little intel. Check out the CVB calendar to see what conferences will be in town, if it looks slow, you will have an advantage.

And it’s not just room rates. Meals are huge bargaining chips. If you know for a fact that your organization spends $40,000 on meals (including breaks, refreshments, etc.) tell the hotel you will guarantee them a minimum of $35,000 in meals. I’ve had hotels stop in their tracks when I gave them a meal guarantee and instantly concede to what I wanted in room rates. Hotels make BIG money on their meals and breaks. Regardless of what you spend, give the hotel a meal guarantee, you will see that it makes a difference.

As for meals, I always under estimate banquet meals. Hotels will make 10% more than you requested and not every conference attendee will attend the banquet, even if they have paid for the meal. This underestimation keeps me from getting stuck with paying for meals nobody ate and I have never been comfortable with throwing away food.

You have to commit to a minimum number of room nights and sometimes that’s scary because if you don’t reach that number (or typically 90% of that number) your organization will have to pay for the rooms you booked, out of your pocket, as a penalty. This doesn’t have to be an art. Go back to previous year’s conferences and see what your room nights were. Here again, it’s better to under book rather than over book. You can usually add room nights as you get closer to the conference, but you can’t deduct room nights.

Also, never, ever, ever, ever…pay for meeting rooms! Hotels will sometimes suggest that there is a charge for meeting rooms. Unless you are just meeting at the hotel and you are not bringing them meals and room nights, then you will have to pay for the meeting room. But, if you are bringing their hotel paying customers, do not fall for paying for meeting rooms. Those rooms are the enticement of the hotel to get you to bring your conference to them. Ergo: FREE.

Always keep in mind, the staff at the hotel you are negotiating with are “salespeople.” They have to sell those rooms and facilities, in fact, they are anxious to sell those rooms and facilities. Remember that when you walk in the door, you are potentially bringing a lot of business to the hotel and you are helping the hotel keep its doors open.

Happy negotiating! Bunnie

Contact Bunnie Riedel at info@riedelcommunications.com