Looking for cost-saving tips you can use when negotiating with hotels about fees, surcharges and AV? Here are some strategies from Innov8’s Cheryl Payne.
Fees and surcharges continue to proliferate throughout the hotel industry, among others. They also have been a tough negotiating sticking point for many meeting and event planners who would like nothing better than to eliminate them altogether. While that may or may not be possible, there are ways to strengthen your argument. AV costs also are a difficult area for many to negotiate, even as they make up an ever larger proportion of a group’s overall budget.
Prevue recently spoke with Cheryl Payne, CMM, Strategic Partner at Innov8 Meetings & Events, to learn the latest cost-saving strategies. Payne, who has been a meetings and hospitality professional for nearly two decades, specialized in meeting management support services, strategic meeting management, contract strategy — and budget and cost-saving techniques.
Prevue: One frequent complaint meeting and event planners have centers around extra fees and surcharges. How do you protect your group against attendees being hit with those added fees?
Payne: You need to have a surcharges clause in your contract. You need to ask the hotel to clearly list all the fees and surcharges in the contract, then negotiate those surcharges and fees to either eliminate or reduce them. I also include that these surcharge reductions or caps be honored for my group for a year or two.
From the hotel’s perspective, the items they’re covering under the resort fee, for example, have great value, but from the meeting planners’ and attendees’ perspectives, a lot of what they offer aren’t applicable. Meeting attendees generally don’t need or want complimentary one-hour bike rentals or a $5 credit for dry cleaning services. I ask the hotel to reduce or eliminate those fees based on our group being meeting attendees, not leisure guests who might use some of the resort fee’s inclusions.
The hotel industry makes billions of dollars every year on just the extra fees and surcharges, so if you don’t know what to ask for, you could be leaving a lot of money on the table. Some hotels are open to negotiating these fees, some are not, and some might leave it to the individual attendee to select whether to pay the resort fee. But it should be included in your negotiations with the hotel.
Prevue: What about AV contracts specifically? Planners often say that this can be a difficult area to negotiate.
Payne: What a lot of people don’t know is that hotels profit from their in-house AV — it’s actually one of their largest profit-margin areas. Any discount the hotel gives you is significant because it dips into the money they’re going to make for your group on AV and also dips into the money made by their in-house AV partner. They both need to make their money on the group’s AV, which makes it an interesting negotiation. The hotel may say it’s maxed out on discounts, which typically run around 20%. In that case, go have a conversation with the in-house AV provider. The goal is to get flat-rated pricing for, say, simple, basic a small, medium or large AV package for breakouts. Will they agree to not charge overtime fees for a Sunday load-in (hotels prefer a Sunday-to-Wednesday pattern, but it will cost the group more to load in on the weekend)?
Prevue: How important is history to saving costs in negotiations?
Payne: At Innov8, we evaluate our clients’ RPF to see where their biggest spend has been and where their pain points are, then tailor and negotiate on their behalf based on their needs and big-ticket items from previous programs. For an annual meeting, I’ll evaluate the last couple of years and make recommendations on how we can enhance their savings. Then we document all this data in a cost-savings report. Putting your savings into a report year over year allows you to see what you’re actually saving. This is huge for stakeholders and the organization as a whole.
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