HOW MEETING PLANNERS WIN AT HOTEL NEGOTIATIONS

Hello, this is Les Goldberg, and welcome to The Road Ahead. The Road Ahead podcast is dedicated to the future of the live events business, bringing together industry experts. Hello, production world. This is Les Goldberg and The Road Ahead. Today, I have four amazing guests. I have John Cruz. He is the Senior Event Planner for MetLife. I have Adriance Cesa. She is with Huntington Bank. She's the Events Manager. I have Mandy Hazlett. She is the Vice President of Events for National Precast Concrete Association. And I have Larry Epstein, who is the founder of The Launch Group. Everyone, welcome to the show today. Hey, great to be here. We're glad you all are here, and thank you for your time. Today, we're going to talk about a near and dear subject to me, which is something that is so important that every meeting planner should listen to this podcast, and the subject is negotiating the contract with the venue. And all of you have insights into doing this. So I'm going to throw out my very first question, and I'm going to throw it out to Larry Epstein. Larry, what does a winning strategy look like when you start negotiating with the venue? So tell me, how do you go into this? And we'd like to hear your thought. Well, I'll just play a short movie. Here's what happens. Our planner gets a great rate at the property. We are working on content. We're developing the theme and the strategy and the run of show, and we're getting all the visuals together. And we've got different screens and things like that. And oh, by the way, we got to create a lighting design for the hotel rigging. So we create a design, we get the ceiling plan from the hotel, and we submit to Encore to get us a budget on rigging. Well, what used to be 10 grand has become 50 grand. And what used to be a service has become a profit center, just like crew parking, electricity, and all these elements need to be negotiated at contract. Because two weeks out, we get the rigging budget. Oh, my gosh, it's 50 grand. Larry, this is coming out of your budget. I go, well, I can't control that budget. But that becomes my problem. So we've gotten our with our sticky clients, we've gotten involved in contract, and we negotiate the rigging rates at that time. Got it. So starting at the very beginning, you want to have as much detail, because that's going to help you negotiate all the elements. Adriance, what are your thoughts on this? Are you on board with what Larry said or your strategy when you're starting the negotiation with the venue? What are your thoughts? Absolutely. I always start with the contract. The contract needs to be as detailed as possible to make sure that we know any fees that need to be included or not included, starting with AV exclusivity, and if we're going to use the onsite AV or if we're going to bring in an outside partner. I found that a lot of times later, we'll get thrown in things about rigging in particular. We've gotten around that by saying, well, you're, we never got any notes about ground supported rigging. So we tried to go that way rather than use the hotel rigging because that $50,000, it has added up very quickly. Well, it's interesting. Larry was talking about it from a service to a profit center, and that difference has really changed people's strategy and approach and the budget. So, John, what are your thoughts on negotiating the contract and how you start, and what's your strategy? Thank you for asking that. I feel like the most important thing is really going back a step and realizing that, you know, what's the interest? How much, what's the value of having us being at that particular venue? Do they really need that piece of business? Are we just filling a hole? Is there a true partnership? It has to be a win-win on both cases, so it doesn't, when we negotiate or the starting point isn't necessarily about being the least expensive, but being, knowing that it's going to be a valued piece of business and the staffing levels will be proper, the service levels will be proper, and, but I really feel like it's got to be a true partnership and that we're excited to be there, they're excited to have us, and at the end of the day, it's all about repeat visitation. You know, they, if they have that mindset of wanting us to come back when we have the mindset of, that we had such a great experience that we're going to come back, then it really becomes a really overall win-win for everybody. So you're trying to figure out the value that you bring to the venue, and that value gives you some leverage in starting that negotiation. It was interesting, this kind of Larry spoke about really coming at it with the details, and as much details as possible, so you can really negotiate the elements, whereas, John, you're really looking at the value proposition to the venue and the potential for repeat business, and that might really start the negotiation. Mandy, what are your thoughts? What's the winning strategy that you start with? No, I'm a little bit coming from the same campus, John, and so for me, it's kind of starting, you know, you've got to have that open communication, that transparency, and that dialogue. You know, you're starting with the salesperson at the venue, you're not starting with the event person that you're going to eventually, you know, work with once you get through that contracting phase, and so I, you know, I go at it with a mindset. Unlike some that, you know, some people that I've worked with in the past, I come at it with not the attitude that the venue owes me, you know, that they, if they don't have my piece of business, then they're not going to make it, and that's not true. This industry is so big now, and has really made a comeback that they may or may not need my piece of business. There might be somebody else in line right behind me waiting to get into that venue, and so I come at it with kind of that, let's start the open communication, the dialogue, let's both be up front. I need to be up front with what exactly it is that my event is going to be, and what are some of those roadblocks that I run into with my event that the venue might not know that's going to then open up those conversations to, you know, are there restrictions? Are there weird, unique things about my event that, you know, this place needs to know in order to really start putting down the numbers that make sense? It sounds like your approach is more of a partnership approach, then, and that partnership approach is can we both win and find that win-win, which is a really interesting thing. Going back to Larry, Larry, is this process difficult? Is this process a difficult process? You know what, it doesn't have to be, and when we're, you know, our good, our close clients, we're working on this two and sometimes three years out, but, and again, in production, and as you know, Les, we have the ceiling plans just about up to every destination hotel in the country. We can whip out a rigging plan pretty quick to get those budgets done at contract, and that's what's really important, and we're saying… Well, you know, we can always get pretty close because, you know, there's only set points, there's only set things you can always do as far as weights and things and actual design that will evolve, but Encore's going to want that eventually, but, you know, it's just another day at the office for us, but it's no problem working a couple years out either. The biggest problem is finding out two weeks from load in that that's another 50 grand, and then that's when my client flips, and again, it becomes my problem. Well, I guess we're going to have to do light trees. Nobody likes doing light trees. It's just never have that, you never get the right angle. Got it. Adriance, do you think the process is difficult, or what are your thoughts on, you know, is it an easy process or is it a difficult process to get the outcome you want? You know, that's a great question. It definitely depends on the partnership, and if you're using in-house versus an outside venue or an outside AV source that you really trust. It definitely has gotten more challenging over the last few years, and again, I mean, I hate to come back to this, but it really comes down to the contract and what's in there and the details that are provided, and we try to make sure that our contract, if Encore or whoever the in-house AV has a separate addendum, then that needs to be attached to the contract, so there's no surprises. That's probably our number one pet peeve in event planning is we don't like surprises, so we're always trying to make sure we have all those details. You know what's interesting? Do you think most event planners know that approximately 50% of every dollar that's paid to an in-house is going to the hotel, and it's not going to provide any value to anyone other than the hotel except in the form of a commission or a profit, kind of a profit opportunity, and I would suggest in rigging, it's a higher number, which is even crazier, and so these astronomical figures are just to pad the profit center of the hotel, and it puts a little burden on the company that's trying to put their event on. It's just challenging. So back to John, do you find the negotiating process difficult, or do you find it to be an easy process? I wouldn't say easy, but I do not find it as a difficult process, but I think because I feel that there's been a level of, you know, once you become a seasoned professional within the organization, both from the planner's perspective, as well as the salesperson from the hotel that you're working with, I think there's a mutual respect or a mutual understanding of what can and can't happen, what you can, where is their wiggle room, where can you adjust stuff, to answer your question. I think it's a big surprise if they knew the commission that goes back to the in-house as a profit center. That is a big dollar amount, like you said, so I would agree with that, and it's a surprising one when people find out for the first time, but I haven't, because of having done this long enough, there's this true negotiation and true flexibility to be able to utilize or bring in your own production company or partner with that and figure out that negotiation, and I think it's a big surprise. I think negotiation can become a little difficult depending on, you know, who you're dealing with, that kind of thing. I think it's interesting, your original thought was, depending upon the size of the value of what you bring to the venue, that gives you some leverage. You have the biggest shows, then obviously you have a lot of heads and beds versus a smaller show. Mandy, what are your thoughts on the negotiation process, and do you find it to be easy or difficult? A little bit of both, I think. I have just come off working for a really big show, and just like you said, the more heads and beds that you have, you start to up the ante in the negotiation power that you have, and now I'm working on events that are a substantial size, but we don't really have as much production that I'm used to working on. And so it is a little bit more difficult, you know, to negotiate, and it's the hidden, you know, it's now the little hidden gems that I like to call them that are getting, you know, tossed into contracts that, you know, we didn't see five, ten years ago that are now popping up, all kinds of different, you know, they'll call them, I mean, it's a variety of names. No longer is it just the service charge and the sales tax. There's little tiny things that are poured into there, and when you aren't a seasoned professional and you don't really know how to work in the game per se, it can get really, really expensive if you don't have that negotiation hat on and know exactly what your event is and what you need to look for. So yeah, it can be easy, it can be difficult, depending on where you're going. For sure. You know, what's really interesting is the negotiation for any meeting planner has to happen all before that contract is signed, because once the ink is on the paper, that's when we're just trying to adhere to some agreement that someone made, and I think one of the most valuable things any end client can have is a smart meeting planner and someone who knows the experience and the things to look for and to know the areas where they can negotiate, especially, you mentioned ground rigging, Adriance did, or actually Larry talked about light trees. But so, Larry, where do you think there's leverage in the negotiation and with the venue? And is it really about the size of the number of rooms? And if you don't, if you have a small meeting, you don't have a lot of power. If you have a big meeting, then you have more power to get a good deal. Well, you know, there's a couple ways to look at it. You know, we're used to negotiating with our close clients at contract, and we try to get it done with our clients and we work hand in hand, negotiate the best possible rate. The other thing that planners can do is, this rigging bill will not exceed x, and you just- Like a max. Yeah, here's your max, and that goes in the contract, but that's got to go at the rooms contract. It's got to happen. What do you do when someone doesn't have a finished plan? Because, I mean, we're going to do so many thousands of meetings that they don't have a plan. I'm always the bad guy. It's the bad guy. Oh, my gosh, I can't believe this rigging is $50,000. What are you going to do about it? Sometimes, you know, you've seen this list too, sometimes it's $200,000, depending on what conventions So someone told me this years ago. I was at a show at the Marriott World Center Orlando, and I asked someone who was with the AV group, and they explained to me that during 2008, when the economy went down, that they still, the hotel still wanted their income stream. So they came up with this idea of cranking up the rigging charges and making them exclusive under the guise of safety and protecting the building. And that's when rigging became astronomical. And today, I feel like if you don't negotiate the rigging, the AV exclusives, the power and the internet before you sign that contract, you're setting yourselves up for just a disaster. Or, you know, it's just, it's unpalatable. And it's all negotiable. Because, you know, I've seen the sales guy go, well, we're not going to, we're not going to sign because you're rigging's too. I've seen the look on his face. What do you mean? You know, so of course, they find a way. We've had similar experiences as well as a large convention hotel in Orlando. I mean, we've been working, in fact, this year will be our 26th year with this group in there. They do a front and rear lighting truss, they hang a PA, they use like a B band, they had 38 special last year. So we're at this big convention hotel, rigging bill was nine grand. We come back two years later with the same rig, the rigging bill was 36 grand. Same rig. My client on the desk, I called the, I know the house rigger over there, I called him and I said, Richard, what? And he goes, Larry, it's not us. It's the hotel. Meaning it's not Encore. You know, and they have to increase their commissions back to the hotel on rigging versus AV. It's another 25. I think the prices have gotten crazy. But let me switch gears. I'm gonna throw this to Adrian. Adrian, you know, sometimes the hotel when you sign a contract has a set of production guidelines. And inside the production guidelines, they refer to another set of requirements. So sometimes the exclusives are hidden and hard to find. Have you experienced this? Oh, yes. And when I do, I strike that through. And I say it has to be an addendum to the contract will not accept any hidden exclusives. And it has to be detailed and it has to be specific. You know, you never know what's going to happen from day to day. And if I'm suddenly not there to negotiate or review the contract, the next person has to be able to know exactly what the pricing is going to be. No surprises, right? No surprises. No. Hey, John, on the same note, have you experienced with Adriance, this idea that in these contracts with hotels, they're putting these crazy production guidelines that refer to some other set of guidelines for the exclusive and that causes consternation because you get these surprise invoices. Yes, I think we're fortunate enough to in our organization, we have a dedicated team of audiovisual production professionals that I like to think are some of the best of the best. And they're able to negotiate that and be able to look for that and track it. I think the only areas when we're dealing with a union hotel, for instance, it's not open for discussion, they're certain. And that's where we've had to consider that within the budgeting. But other than that, it's always open for discussion. And I think you touched upon some of the interesting ones like a Wi-Fi, you know, one one hotel, it's $200, one hotel, it's $2,000. So there's got to be room for negotiation. And, and, yeah, that's how that's how it works. Mandy, what are your thoughts on the, on the contract? And these these kind of hidden things in the contract? Do you scour these contracts looking for all the gotchas and try to try to spell them out or cross them out to avoid your clients getting kind of a host? proverbially? Yeah, yeah, absolutely. Again, it's it's the upfront work, right? I mean, that's part of what our positions are required to do is to get all the information, you know, you get the initial contract, you know, from the hotel. If you don't go through that thing, line by line, you will get pinched somewhere. And just like Adriance said, we don't like surprises. We don't. Not in a professional sense. We don't like surprises. So yeah, you have to come through that. And that's when you got to start asking the questions and asking for the backup documentation. Because once you guys have all said once the ink is on there, it's done, it's hard to go back and renegotiate once you've already signed. So so this is interesting. I've been to many industry shows, and people and the meeting planning business. We don't have enough discussions about the these crazy contracts and the then money involved and and where the money follow the money trail. Why is it that way? Larry, you have any opinion on that? Well, you know, it's just the world less. I mean, we're we all have goals, especially now that the many hotels are owned by private equity. If you don't hit your nut, you know, you've I appreciate it. And it's all part of the big picture. But you know what? We all got to learn how to play the game too. And we can solve this all together if we all work together. That was once a prophecy. And you know, Wi-Fi has gotten crazy. It's just crazy. Oh, my God, it's crazy doesn't even describe that, you know, that you think they're selling diamonds instead, it's Wi-Fi, which, you know, you can buy it for at home for 50 bucks. But for some reason, the same the same Wi-Fi in the ballroom is, you know, 5000, the $50 Wi-Fi, it's not. I think the best strategy, if you just don't want to get into the production details is to put a limit on, hey, I'm gonna only pay this. I'm going to pay 20 grand for Wi-Fi, no more, I'm going to pay 20 grand for ringing home, things like that. But it's, it's a tough world. Everybody's got to hit their nut, especially with private equity, as you know, I mean, if you don't get your goal, you're gonna be looking for a new job. So I respect the world the way it is. I gotcha. So So to john, what do you think are the elements of a fair contract? You know, like, what are the right things if you if I said that's a good contract, it's fair and equitable, you've done a good job? What are the you know, is that a fair price on all the things we've discussed? That is that it up? Yeah, it's a combination of a fair price, but also the, the flow and the thought that it was put behind it, you can tell if, if it's a well thought out strategy or game plan for implementing your meeting, like they want to do more than just deliver the basics, they want to deliver some extras, and, and have a true partnership. They're in it to make money, just, you know, and we're in it to have a successful event. And I would like to go back to that, the thought of repeat visitation, you know, we want to leave there going, wow, this is something special. I can't wait to we, you know, we definitely wouldn't use you guys again. And they want us to have that attitude as well. And I think competition is the healthiest part of that whole negotiation. When you do have the opportunity to be considering one or two different properties or two or three different properties, then all of a sudden, everybody becomes starts to sharpen their pencil a little bit more and, and really want the business. I think competition is key if you can, if you're fortunate enough to have a couple different options. My question, this is to Mandy. This is my final question is, what's the most rewarding part of closing the deal with the venue and having been successful in negotiating? Well, you know, you did a great job, you got a fair deal, you protected your clients best interests. And what's the reward for that for you? And how do you make you feel? I mean, I think it's, you know, when everybody is done, and you're walking away, that you, you know, as a planner, you have to have your list of the things that you're willing to be flexible about before you walk into that, to that negotiation. And at the end of the day, you can walk away with, you know, you feel good with the rate that you got, you feel good with the clauses that were, you know, redone, you feel like you touched everything that they're, you know, they're always going to be surprises, right? I mean, it's the industry that we're in. But you've created some really good relationships so that when you do get on site, and the proverbial crap hits the fan, it's either going to be the venues done something and they need you, or you have forgotten something and you need them. And because of that work that you did, in that negotiation timeframe, everyone's willing to step up and help the other person because at the end of the day, you want a good event on both sides. Like John has said, they want repeat business, they want word of mouth. My gosh, this industry is big, but it is small. And we all talk, providers talk, planners talk. And so you know, you want that to somebody to walk away saying, yep, everybody should try an event there that was really great. Or if I need references, yep, this was a great client, you know, they're great to work with, you know, things of that nature. So if you can walk away with those good feelings before you even get on site, then yeah, I feel like you've done, you know, you've done a great job in negotiating your contract. Randy, you described creating one of the seven habits, which is a win-win, a win for the venue, a win for the customer, and the whole experience. What you described, if you can create that environment, then everyone leaves with a great feeling and you go into the event prepared for success. I think that's awesome. Larry, do you have a thought on what's the most rewarding part of cutting the right deal and everybody wins? Well, yeah, that's it. You know, it's just exactly what Randy said. We just were on a program. It was so hard getting to it. And the venue was very tough to release space. But when they finally did, and we reacted quickly, and the show was a huge success. In fact, we had three events in one venue. That is success. And really, I can't, I'll just brag about the Fairmont Toronto. They were awesome. They killed it. Killed it for us. Well, I hope to visit there. And Adriance, can you advise your thoughts of what's the best reward of basically closing the deal and coming up with a winning negotiation? What are your thoughts? Yeah, I mean, Mandy, in particular, really hit it on the head. It is creating that partnership. And it's not just a one-time deal that it's going to continue on in the future. And you're going to want to go back to that property again and use them and know that you are going to have a great event. And your colleagues are going to be happy. Your attendees are happy. The AV company is happy. The hotel is happy. That's the best part. The best part. John, would you opine as the last person on this podcast as far as the most rewarding part for you, having struck a great deal, and everybody is going to win? I think it's the repeat visitation, wanting to come back, creating that win-win. And at the end of the day, looking for the positive intent, knowing that we all got up in the morning wanting to do a fantastic event. And if both I think the quote of the day is we're going to make it work. I think there's a little bit of caveat emptor. Let the buyer beware. I think a good meeting planner is essential to anyone who's going to book any business with a venue. I think going into it with a strategy for your AV, for your rigging, for your power, for your internet, making sure you know the rules of the game so there are no surprises. There have been a lot of great nuggets on this podcast. And all of you, I want to thank John, Adriance, Mandy, and Larry. You all are amazing. I look forward to seeing you in a ballroom, a convention center, a venue of some sorts, somewhere where we're putting on a show. And this is Les Goldberg and The Road Ahead. Everybody, great job. Thank you so much.