Navigating the Ups & Downs of Contract Negotiation

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Contract Negotiation; Photo Credit: rawpixel/Unsplash

Meeting planners are reporting that contract negotiations are only getting more difficult.

That’s why Prevue spoke with Cheryl M. Payne, CMP, CMM, senior director, global meeting services for Meeting Sites Resource. With 15 years of contract negotiating under her belt, Payne often speaks on the topic. In this Shakedown, she shares some of her advice on how meeting planners can accommodate today’s ever-evolving world of contract negotiation.

What are the current challenges that meeting planners are facing when it comes to contract negotiation?

Some of the current challenges include:

Lack of Flexibility with Contracting: In some cases, the hotels will send us their agreements in a pdf version, not allowing us to add our own contractual language and/or changes. It can sometimes be a “my way or the highway” sort of mentality.

Non-mutual Cancellation Clause: I would never recommend that anyone sign a contract with a one-way cancellation. More often than not, hotels are expecting planners to let them get away with a non-mutual cancellation clause so that they can have the ability to cancel on our group if a bigger/better group comes along. The cancellation clause should always be mutual and also have high penalties for the hotels in the event of the cancellation. Be ready to prove your damages should a hotel cancel.

Attrition & Group History: I am seeing the attrition windows closing up. Again, since the demand is so high, the hotels want to fully maximize their profitability, so they are requiring sometimes three to five years of group pick-up history before they will even provide a proposal/rates. I am also seeing a smaller attrition window for planners, meaning the hotels are trying to only give a 10 to 15 percent attrition allowance per the contracts.

Can you provide tips on how planners can accommodate these challenges better?

Have an open mind! And expect and anticipate the unexpected. I have been preparing and negotiating contracts for over 15 years now, and I am still seeing new contractual language or terms that I have never seen before. We are working in a unique environment, and we need to be ready and equipped to negotiate all clauses.

What is your No. 1 piece of advice for meeting planners working on their first contracts?

Educate yourself, or find a partner that really knows contracts so that you don’t put yourself or your organization in a sticky situation. Continue your learning, and expand your contract knowledge and expertise.

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