Hotel Negotiation

Why Hotel Negotiations Are Like a Game of Tetris

Hotel execs explain how flexibility and communication are essential to the negotiation game.

Early Saturday morning during Global DMC Partners’ Connection 2017 conference in Las Vegas last month, a dedicated audience of meeting planners showed up, coffee in hand, for a special session. Organizers added a hotel negotiation panel after the topic topped the request list in pre-event surveys. Catherine Chaulet, president of Global DMC Partners, said, “Once we surveyed the clients, one thing became clear: It is hard to negotiate the right rates, cancellation policies, and attrition clauses.”
As well as Chaulet, the session contributors were Virgil Napier of Kimpton Seafire Resort + Spa; Azalea Hernandez of Fiesta Americana Puerta Vallarta; Megan Archambeault of MGM Grand Las Vegas; Mark Sergot of Associated Luxury Hotels International; and Mustafa Yalcin of Universal Travel Services.
Sergot of ALHI began the session by saying that planners are facing a tight situation. As demand continues to grow in the luxury sector, supply is minimal in terms of new hotels coming up, and that puts pressure on rates.  It also means hotels can be choosier, he said. “They want the ideal program and fit.” His advice is to be fully transparent about what your needs are; you don’t want to waste time competing for the wrong property, and if the hotel considers you a good fit for them they will be more likely to negotiate with you. Archambeault agreed, saying, “It’s hard for us to come up with flexible options if we don’t know your needs, so you need to communicate with us.” Hernandez emphasized that that it is not enough just to list your requirements, tell them why you want that particular hotel. Hernandez said, “You need to discuss your expectations.”
Archambeault described the process for bookings and the information MGM typically looks for from clients. “Our team has a daily business review to talk about the leads that came in the day before, and sometimes there are three or four groups looking at the same week. First, we need to know when the group will make a decision, and then we need to know how flexible the group’s dates are.” She joked that even though MGM is sometimes thought of as the “Monster of Vegas,” the sales team still has to make choices, and they want to have a comfortable partnership with clients that will last into the future. She said, “We have many properties, and some may be a better fit for a client than others.”
Yalcin gave the audience a handy visual when he said; “Think of it as a game of Tetris; it has to be the right fit.” He suggested meeting planners begin the negotiation with the last three years of data about their meetings, because, “That way we can look and see if you need full service, or short cancellation margins, or something else, and we can see if we bring each other value.” All the hotel representatives on stage agreed they are happy to take the historical data from another hotel company. Sergot warned, “It’s all about the information provided on the front end. If you just ask for rates and dates, the sales person will negotiate with the client who provided the most information on what they need.”
As well as the decision timeframe and flexibility on dates, Napier stressed the key piece of information to provide. He said, “If you want to ask for a higher room block, you need to have some historical data to say you can fill those rooms.” Archambeault gave an example of a group that only picked up 60 percent of the block and the event finally collapsed. When the group wanted to come back and rebook, Megan says, “We stayed in touch with them every 30 days before the event so we could see where they were with room bookings. The mutual review period protected us and them.”
Although international destinations can be a good option, especially if the more flexible low season coincides with your desired dates, planners should understand a hotel’s exposure before attempting to negotiate. Napier advises looking at the booking window for properties. “Our average in the Caribbean is 372 days right now. For resorts in the U.S., it is 180. If you tell us 60 days out you don’t need the rooms, we’ve missed our booking date.” And don’t think the hotel will be the only one left holding the bag for lost bookings. Napier said, “If I have to, I will sell the rooms for a lower rate online, and your attendees will be wondering why they paid a higher rate.”

 

 

 

 

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