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.