Have you tried to negotiate an event contract for your company recently? If so, you know the kind flexibility and generous terms are now a thing of the past. In many places across the globe, in-person and hybrid event business is booming. As hotels, venues, and vendors try to make up for lost pandemic revenue while also battling struggles like inflation and staffing issues, they’re staying strict in regard to terms, rates, and fees.
So, we want to provide some tips and tricks that we’ve worked out after negotiating many contracts for this year and beyond that you can use when negotiating your in-person or hybrid event contracts.
Trends in In-Person or Hybrid Event Contracts You Can Expect to See
Before you start sourcing and negotiating, it’s important to first understand what you’re going to be up against. Here are a few things we’re seeing that you’ll want to note:
Higher Rates in General
Hotels are selling at rates up to 41% higher than we saw pre-pandemic. It’s insanity and it isn’t just leisure travelers; this applies to group rates too. Expect room rates to be much higher than meetings and events past.
More Room Rental Fees
Teams are getting a directive to recoup income where they can. While many properties are still okay with waiving room rental with F&B minimums, some are adding small rental fees to the mix.
Pro Tip: What you can do here is ask to add room rental fees on a sliding scale. So, if you exceed your F&B minimum, that rental will be waived. This is typically a win-win because it’s still tied to greater revenue for the property.
Slow Response Times
Now, this is not in all cases, but it is important to keep in mind if you’re getting frustrated by lack of response. Many teams, although they’ve brought some sales team members back, are still operating with skeleton crews. Teams are overloaded with business inquiries because business is booming, but teams are struggling to fill the vacancies quickly enough to keep up with demand. This paired with more stipulations at the corporate and brand levels on terms and contract edits is making it a much longer process to execute contracts.
5 Tips for Negotiating Your In-Person or Hybrid Event Contracts Today to Protect Your Event Investments
The world is still an unpredictable place right now. But in the hotel and venue world, they’re ready to move on and get back to business. There is so much congestion from postponed and rebooked meetings, that it’s difficult to find availability and hotels are playing hardball as we mentioned. So, if there are a few things you want to pay attention to, here are some of our top tips (note that this is not all you should look for, just a starting point):
If They Won’t Accept a Rebook Clause, Ask for a Resell Clause
A lot of hotels were accepting rebook clauses where cancellation fees were applied 100% to a postponed and rebooked event during COVID. Now, due to congestion, a lot of hotels will not do this and if they do, they’ll only offer a 50-75% credit. So, if they won’t work with you there, ask for a resell clause. This will state that any rooms that are re-sold will count towards lessening your cancellation penalty should you have to cancel or reschedule.
Negotiate Your Attrition Terms
While most are ready to get out and travel, not everyone is. This is making attendance uncertain for some. With that, you want to make sure your attrition is flexible. Ask for cumulative attrition that includes any pre- or post-event stays and ask that attrition is relieved for any night the hotel sells at 95% occupancy or above.
Don’t Forget a Lowest Rate Clause
Since the hotel rates are soaring you want to make sure that your block gets filled so you don’t get hit with those attrition fees we just mentioned. So, how do you do that? You add a lowest rate clause that guarantees your group is receiving the lowest group rate. Some hotels will accept that outright, or ask for verbiage that excludes pre-negotiated third-party and aviation industry rates as those are typically quite low.
Ask for an Outline of All Fees
Your audio-visual setup fees are always going to be a major cost for your event. But, with post-COVID events, they’re even higher than ever before and the minimums are typically higher as well. Ensure that you have all the tech budgets laid out before you sign on the dotted line with a fees added after contract execution clause that protects you from any additional fees not previously agreed upon.
Protect Future Events with an Economic Conditions Clause
Since many hotels won’t include COVID-19 clauses anymore, one way to protect yourself for future events with the uncertainty of the world is an economic conditions clause. With this, you can reevaluate should economic conditions change prior to the start date of your event.
Want Help Navigating the New World of Event Contracting?
Now, this is just the beginning when it comes to in-person or hybrid event contracts in this new landscape. And it’s important for you to know that we are not lawyers. But we do spend our days negotiating with hotels and venues on behalf of our clients and this is what we’re seeing out there and what we’ve had success negotiating. Our loyalty is always to you, ensuring you get the best value possible from your event contracts! Let’s set up a call to chat about your upcoming events and how we can help you navigate, while negotiating your in-person or hybrid event contracts on your behalf.