Time and again, I have witnessed numerous organizations lose substantial amounts of monies because they failed to pre- negotiate numerous clauses, that are often key to substantially protecting the organization's interests. Over my career in event planning, negotiations, and organizing, which now spans over more than thirty years, I have continuously tweaked and adapted my contract demands, in order to assure these protections. Those areas that have often caused the greatest agony for organizations are: limiting/ amending attrition clauses; addressing audio- visual expenses; protections regarding food and beverage areas; protections because of economic downturns, wars, or acts of God (weather, etc.); negotiating in modification and give- back dates; and, specific language regarding the ever- expanding tendency of many resorts to add on mandatory fees and service charges.
1. The strict attrition clauses of the past must never be permitted in a negotiated contract. The best way to address this is in advance, via a tersely and properly written and crystal clear Request For Proposal (R.F.P.). It is essential that group's negotiate out or down attrition (i.e. not meeting certain specific numbers) either outright, or by instituting a substantial compromise/ outright reduction, or by being given flexible give-back dates (where the group can return rooms and reduce other targets, without penalty).
2. Audio- visual costs are often the great eye- openers to non- professional event organizers. These costs often escalate dramatically, often to the disbelief of amateurs. Professional negotiator first reduce substantially the audio- visual fee schedule, negotiate certain comps and allowances, and get in writing, in detail, all specific costs in this area, written in plain English descriptives.
3. Organizations must put in a clause regarding economic downturns, and the possible implications. Good negotiators have clauses regarding stock markets substantial drops, energy/ transportation substantial increases, acts of God (weather, war, terrorism, etc). Again, these clauses must be specific, and permit substantial givebacks if these parameters occur.
4. Giveback clauses must be included. These clauses are capable of protecting both the vendor as well as the organization, because it permits givebacks (and thus eliminates penalties, etc.) at three specific times (I recommend at 90 days out, at 60 days out, and then the final revision permitted at 30 days out, by specific percentages).
5. Many hotels today, observing the airline model, have instituted certain resort fees and service charges, in an attempt to promote an attractive hotel room rate, while collecting additional revenues. This has varied substantially from property to property, and, it is not unusual for the room rate promoted and the amount paid per night (adding in taxes, fees and service charges) to differ by thirty percent, or even more. Negotiators should have any fees that will be charged spelled out in detail, and a clause stating that the only fees the group will pay are those stated. In addition, negotiators should look closely at what these fees are for, because often what is included are not things that a large percentage of the group will either utilize or find of value. One area today that many surveys indicate are most resented in terms of fees, are substantial charges for internet access. With many properties today including or, at least, substantially reducing the cost of internet access, attendees often feel ripped off by excessive fees in this area. When a hotel says their service charge includes domestic local and long distance service, most attendees today find that of little value because most calls are made by their own cell phones anyway, and they rarely use these phones. Hotels that promote their spas as a reason to come to that hotel should not be charging fees for basic services, such as locker room access, saunas and hot tubs, or exercise equipment. It is appropriate, however, for them to charge additional for more advanced services such as massages, salons, classes, etc. Again, negotiators must carefully negotiate appropriate language into the initial contract.
Beware that it always easier, less stressful, more efficient, and fairer to all, to pre- negotiate in all of the above areas, and more. Failure to do so often leads to negative financial ramifications.
No comments:
Post a Comment