I felt sort of obligated to go to a session on negotiating convention center contracts, since it is I'm sure something our readers would want to know more about, even though I really wanted to start off the day with the "Making the WOW factor relevant" session, which sounded like a lot more fun. But I'm glad I did drop by to hear the latest on negotiating with centers from Mark Roysner, attorney at law with Roysner & Associates (though I did hear terrific things about the WOW session, too, which was led by Mike McCauley with ProActive and Red7Media's Jim Alkon).
First off, we did an audience response system survey of the audience, and a full 60 percent were anticipating a decrease in attendance in the next six months (20 percent expected a 6-10 percent decrease; 40 percent anticipated a greater than 10 percent decrease). So, looks like everyone's bracing for some rough weather ahead.
Anyway, Roysner talked about a bunch of things, but a few stand out to me right now:
*Read your contract, every word, even if you've read the same contract from the same center 10 times before. Because even if the contract language hasn't changed, the situation probably has, and you'll need to consider what that language means when applied to how things are now (and what you're anticipating). Plus, they do change the language every now and then, even though it may be hiding under the same old headings. And read it in the beginning of the site selection process, not after you've already contracted with your hotels and will basically be stuck with no other options.
*They might be more willing to negotiate certain things nowadays than they were in the past, such as minimums on exhibit space. Check to see if your] minimums are guaranteed per hall or in aggregate. He said that most contracts will make you pay for unused minimums in one hall even if you sold out in other halls. Can you go with an aggregate minimum? Then work with the center to keep it reasonable. "Try to get them to modify to take off minimums that have you don’t think you can sell out so they will just charge for the square footage you actually used," he said.
*Exclusives also are a little different these days, he said. While centers used to just have exclusive agreements with telecom and utilities, nowadays it can be security, cleaning, all sorts of other services that they will force you to use. This gets you into trouble with any long-term exclusive contractors you have on your own, since they'll likely raise their rates if they don't get all your business as contracted.
Put in your contract which exclusives are specifically included as of the date of execution of your contract, and put in a clause that you’ll only accept exclusives in place at a certain date. And on your contractor contracts, include a clause that excludes you if the center forces you to use their exclusive contractor. "You have to do it on both ends," Roysner said.
Also watch out for new commissionable issues—some centers are adding DMC commissions (if you use our preferred providers, you don’t have to pay commission, but to bring in your own who have worked with you for years and knows all your group’s quirks, you pay us a commission). He said a fair thing to do is not to charge for bringing that DMC or production company in, but if the facility has to supply support for that company, you pay for that service.