NEGOTIATING THE CONTRACT IN A POST-COVID WORLD

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 on The Road Ahead. Today I have four amazing guests. I have Cindy Lo. She is from Red Velvet. She is the CEO and chief strategist. I have David Sonntag. He is the founder of Decibel Event Management. I have Tim Glanzer. He is the chief elevation officer. And Tim is with Elevated Meetings Solutions, and I have Wendy Drake. Wendy is the president and CEO of The Webster Group. Everyone, welcome to the show. Thank you. Thanks for having us, Les. Well, today we're going to have a fun conversation. All of my guests today are meeting planner experts from different parts of the country. And our subject today is negotiating in a post-Covid world. And I feel like that subject is near and dear to our hearts as our clients are getting ready to go back to live. And some are in the process of planning, and they're making their space bookings and they're making those decisions. And how do they go about doing this? I see the value in what all of you do as experts, and there's so much value that you bring. If anyone were to hire any of you, they would be doing themselves a service because, you know, it's a shark infested waters dealing with the venues and with all the suppliers. So I'm going to throw out the first question. The first question is to Wendy. Wendy in booking an event venue, hotel, convention center, what is different now in a post-Covid world? If you know from when we didn't have Covid, which would have been February of 2020 to today, how's the world different when you try to book something? Well thank you. Les, for us, it's really, you know, working with our clients on their goals and expectations for their event. And it's, you know, I've been a struggle for all of us and especially our clients, you know, to try to figure out their demographics. You know, who's able to attend, who's still not able to travel. So it's that sort of unknown. And working with the client to be, you know, really look at their event. Because then when they go into new into negotiations, they need to say, okay, this is going to be a hybrid event because they don't want to take on too much space and then try to get, you know, try to get rid of it at the end and then look at the spacing as far as you know, what their needs are for a hybrid event or if they're going to go just completely live. So it really is working with the clients first on what their expectations are for their event. Because then when we go into negotiations with the venue, it's easier to really understand the availability because right now available is a little slim in some places. Then the amount of space and the timing is really crucial right now. So it's really understanding the clients then going in negotiations and then working with the venue on, you know, their you know, what happens if we go into another Covid pandemic or what's next. And how do we negotiate all the different clauses for the venue? Okay. Wow. That was there's a lot of lot there. You know, there is a lot there. Tim, I'd like you to. Oh, opine especially being in Las Vegas. You know, Wendy, you're in the DC area. Tim's in Las Vegas. And I think Las Vegas is number one in the world for live events. What's what's different? Tim. Well, thank you for allowing me to be on the show today. You know, I'll speak to Vegas, but I think Vegas is is marrying what a lot of the country and actually globally is happening. And that is the demand is really getting nutty. And therefore the opportunities are tight, especially for 22. But even 23, as you look into 23 and start sourcing and negotiating contracts, the opportunities in most of these, most of these cities around the United States are really getting tight. And so we all know what happens when things get really tight and opportunity and that is that the the terms and conditions favored the venues and favor the opportunities of in my situation most of the time hotels. So, you know, when we start looking at 22 and you know, Wendy made a great point not really knowing where to go with the room block, especially if this is a repeat piece of business. And he made it 1000 in 19. Are you going to go back up to 1000 now. Are you going to do hybrid? I'm seeing the hybrid and virtual model slowly dissolve and in-person really coming back heavy. Most of my accounts are losing the hybrid and really going full steam, especially as you start to see a lot of the the numbers for Covid turning positive and people are seeing the value again of in-person. We always saw the value, but I think now it's a reality. And so when you're getting into when you start looking and sourcing for 22 and even into 23, the biggest obstacle is can you get space and and can you actually secure the rooms that you need? Because the demand is just insane. I love that word. I think it's I think it plays where we're at right now. It's just insane. And in Vegas there is no there is no opportunities in 22 for anything large. I mean, there's there's small, small areas that you can get into for smaller groups, but the large space for 22 is basically gone and even into even into 23, like I said. So the demand is pushing availability. And that's something that I think everybody needs to concentrate on is if you have clients that are are wanting to do an event, we have an obligation to push them to start the process because they're going to be very surprised and thinking, well, isn't there a pandemic happening in 22 and 23? There doesn't appear to be any pandemic. You know, it's interesting when he started this off with talking about, you know, getting with your customer and and finding out what the expectations are. Okay. And then, Tim, you kind of drove the conversation to let me give you what real life is. Real life is, is, is demand is going to be high. And we are going to get, you know, if you're trying to do something, you know, it's really tough in certain markets in Las Vegas, you know, going through 22, which is very encouraging for us, I think. Cindy, would you share your thoughts on the same question, what's different? Well, I was going to touch upon because what Tim just said, also, you have to remember there was a lot of groups that push and rescheduled, so you're competing against groups that could not fulfill their contract in 2020 and maybe some in 2021. And so they pushed them to 2022 and 2023. So you're not only just competing against the new business, but you're competing against the ones that rescheduled. There were several things that were I 100% agree with what Wendy mentioned and Tim mentioned, but because literally we just finished US Grand Prix here in Austin, which I am proud to say, because I just came out of the Visit Austin meeting, that it was the largest attended sporting event in the world to date. Even like pre-Covid, 140,000 people attended on Sunday and we had a total of 400,000 people attend over Friday through Sunday. So the largest sporting event in the world happened this past weekend. So if you think things are not open, you're fooling yourself because we do have a handful of clients that have told us that they are not planning any sooner than 2023 to be back in person. And I have said that's I understand, I respect your decision, but I want to make sure you know that there are businesses that are going back to in-person meetings, and so you should plan ahead. But the two big things I wanted to touch upon is one, there is a shortage of labor. And I'm not just talking about physically having the shortage of people. It's also let's pretend I can get the people. The people don't know all the technical load in, load out procedures. They are needing to be trained. So we're going to face a period of time right now, unfortunately, for probably about a year, maybe even a year and a half in 2022 and into 2023, where we're having to retrain the next set of people that are what I would call entry level. And that was honestly the hardest part of F1 weekend, because I was heavily relying on our partners to bring the stagehands to bring the the extra delivery people, to bring the installation, to do all the things that this client wanted to do safely. Okay. And unfortunately, because due to Covid protocols or due to also them never being on site, ever, this was their second event. They didn't know how to do everything in a timely manner, and it caused us to actually have to cut back on some of the things that we had decided on to build out, you know, custom. And that was painful because this was not about money. This was about the fact that we did not have seasoned stagehands and seasoned installers on site. And part of it also was because we required them to do a Covid test, a rapid Covid test right there before we started the job. And some of them walked, though, we communicated it that we were going to do that on site and some of them walked. They didn't want to get tested. Wow. Yes. Welcome to 2020 one fourth quarter. Yeah. So and then the second biggest thing is I'm grateful for the relationships I have with all the hotel partners in Austin since I've been in Austin, you know, for two decades. But all the people I'm working with there are all new. So they don't even know I knew the property better than they did. And I would be like, hey, I need you to. I need you to open this power like power line and go. I need to find someone to know how to do that. And I go, no, like, we really need to bring the cables like the feed. Like we need to do this now. Like, let's let's go, let's go. And they're like, hang on, I need to go talk to someone to get it. And I'm like, oh my gosh, okay, we have 30 minutes because I thought y'all knew about this since, you know, our pre con. And I was chasing them down because they're unfortunately understaffed as well. So have a little bit of grace. It's everywhere because we did a show in Barcelona and it was there too. It's everywhere. It's not just US based, it's everywhere. So just be prepared for that. And the other big thing since I mentioned Covid testing, we had a new line item that again, I didn't have to have before, and it was in the five figures to do rapid testing for everyone on site. Wow. So please budget, budget properly. Okay. All right. Wow, that you've all taken a different tack on it. David, it's your turn. What's different in the wild world of doing events? Sure. I think following everybody. They nailed it. Wendy. Client needs come first for sure. Figure out what those are. Tim. We're seeing the exact same thing with space booking being very aggressive. If you don't have your your event on the books for 2022, it's going to be very hard to find, at least for the large scale events. And that's DC based. That's Florida based, as you said, Vegas based. We're seeing that across the board. And Cindy rescheduled labor shortage and medical I mean that is we're seeing that as well. So you are spot on. I think for me, the other piece that I'm still seeing, even though a lot of our clients are looking to get back into live, we're still seeing decisions based on municipalities and the regulations and the unknowns. So we just had an event, large scale event moved from DC to Florida for February at the last minute because the venue and the the municipality, if Covid does see another spike, they didn't like the terms in the contract in terms of what they'd owe, and and what the hotel would shut down again. So they moved to Florida, which is, as everyone probably knows, is one of the very friendly states in terms of the restrictions and contracting. And so we're still seeing that kind of the scattershot response to each local municipality doing it a little bit differently and having a different, different tact with live and in person. That's still a factor. And so I think that has to go into where you're looking to book your event and what those regulations are going to be. The other piece I'll say that that's really come into play, that is something new and for our industry is not only the labor shortage, but just the lead time for custom materials. So everything from print houses that have based on their labor shortage are, you know, that used to turn prints in 24 hours or 36 hours. There were 30 days, 60 days out to the soonest prints. And so we're finding some of our go to vendors just are kind of much longer in their in their lead time. And so that's something to really look out for. It's it's something you're really going to have to just make sure you, you plan for as you're building out these events, you can't just turn it in 24 hours like we used to be able to do. That is so true. Yes, yes. Well, you know, what's interesting is each one of y'all are some really unique challenges for our industry as we go back to life. And I find it interesting when when I think I think, Tim, you said something about a lot of them are bailing on hybrid and they're going back to a live experience. And it's just a very interesting approach when, you know, I think some of it's based on international travel coming back. And the US has just reopened its borders, I think in November. November 8th if you're vaccinated. Yeah. Yeah. So if you're vaccinated, I mean, I could you imagine not being able to go to Las Vegas to CES, you know, and and vaccinations. Okay, here's my next question. And I'm starting this one to I'm going to start with Tim. Tim. It's a two phase question. Our place is still responding in what I would call a reasonable fashion. And that would be whether it's in Las Vegas or anywhere in the world. And are there other tough areas for negotiation? I mean, is there any places where you can actually win? And I say win very comically, I will say that Wendy, Wendy provided a great point of what's happening not only in our industry but across the planet. And that is we have a huge staffing issue. And with that staffing issue and the staffing issue is not only the lack of staff, but also what Wendy alluded to, and that is that a lot of new staff, and they may not have been in their roles, and they may not have the understanding of the venue that they're working at because they're new in the roles. And that translates into challenges in response and challenges and accurate responses. So yes, we're struggling, and I'm going to be very gentle with this because some of the communities are doing a great job. But overall, you're seeing, I don't want to say lack of response, but definitely delays in responses in certain areas. I'm speaking mainly to hotels. When I when I say this, I think the other piece of it is, is that because certain companies are now implementing vaccinations in order for them to have employment, they're also losing staff in those areas. So it takes it takes a toll. Yes. Depending on where you're going, there are deals and depending on need dates, just like any other time, there are deals. Overall, I think we're getting strict is in peak times and peak areas and and where there also has been great demand. You know, obviously when there's great demand there's going to be more challenges. So that's all this is, all items that were pre-pandemic. Right. And I think we're getting back to definitely pre-pandemic situations. And in some areas over sometimes you're getting into an area that is even higher demand than, than pre-pandemic. I mean, it has all that pent up demand included current demand. So you have like super demand, have super demand excessive. Yeah. And I you know, I'll tell you, we do a lot of business in Vegas, but we're all over the United States and actually globally. And we're seeing it in a lot of different areas. I think the second in and third tier cities, there's still deals, there's still opportunities. You know, throwing out a couple areas if you're willing to go to. And these are all great locations. I'm not talking down about them, but they're not top tiered cities Milwaukee, Pittsburgh, you know, certain areas like that, there's still opportunities during certain times. There always be certain opportunities in those cities. Austin, I think, is a is an opportunity that is in, you know, Nashville and Austin, very difficult to get into those areas depending on where you want to go, because they're just so popular now. Obviously Orlando, Vegas, Chicago, Dallas, those are always challenges depending on when you want to get in. And obviously I'm talking about larger shows as well, smaller shows you can get in depending on the dates. Got it. Well, I'm going to throw the same question to Wendy. Wendy. Areas for negotiation are people responding, you know, especially in the coming from the DC corridor. What experience are you having? You know exactly what Cindy Lo and Tim said. I just echo the whole labor shortage and it really is impacting every aspect of our planning, because not only you have to deal with that, but you really have to set expectations with your clients, specially when they're really used to the fast 24 hour turnaround or, or whatever. It just it's really becoming a little bit difficult. And, you know, I actually lead that off with all my new clients, even when we're in negotiation over our contract, is you need to make decisions early. Set in those timelines with the clients is super important because it's the labor shortage. And in our AV companies or creative companies, they just need that lead time. So I am finding it a little bit more difficult because there is a shortage to get confirmation on, on, you know, bookings or availability. But then also it's, you know, my job to work with the clients to make sure they give a timely decision. Right. Because that's key. And that's sometimes a little bit difficult because they want to maybe block a certain time. But as everyone mentioned, just really having that timeline, you know, looking at 2022, late 20, 22, 23 right now when setting dates is definitely key. Got it. Cindy, are you finding negotiation to be something that people are willing to do in any way, shape or form? Or is it more like the venue says, look, this is my price. If you're not willing to pay the big, go to another venue and when. And it's kind of the echoed the sediment about this customer service. We're all used to such great customer service. I mean, we're in a service industry and and to find the responses, even when you pay the big the customer service, you probably can't expect that. What are your thoughts? So I was going to mention because so far no one has mentioned this, there's been a few clients that come back to me and go, well, I want this in the force majeure clause. And I have to educate them that unfortunately, Covid is no longer qualified under force majeure because it's a known item. So that has been one to explain to them that that can't be the clause. Now if it's a new pandemic, okay. But again, we need to define what a new pandemic is because it can't be like the Delta variant because the hotels are saying, no, that is not new. This is again under Covid and it's a known entity. Now, I want to share a quick story of what happened to us on a huge event recently in Austin, and because we had rescheduled it for, I think, 3 or 4 times the client thought were safe with the the rescheduling, like, but we they never signed a new contract. What do you think happened? We got pushed from the venue, so we had to scramble to find them a new venue. When we were trying to finalize stuff, we were like, okay, and we're doing the, you know, walk through and finalize and the venue had to come back and go. There's actually another group using that space, so we don't have you on the books. And of course, going back and forth, we realized that because they were short staffed on the hotel side, is that they never moved our hold when we moved it again. They never moved it. So we never really had that new date. And and unfortunately, we did ask for the signed contract, but we just kept planning because we thought, you know, we have a good relationship, everything's good. But until it really came down, you know, putting, putting everything on paper and on the BEO., they were like hedging. And then they were like, I don't know how to tell you this. You don't have the space. And we were like, oh my gosh, because it was a huge event. So we are scrambling, calling around because there's only so many venues in town that can hold this large group. Luckily we found it, but it did burn bridges because then the client, of course was like, I want to sign for 2022, 2023 now because I don't want to lose the space that that kind of echoes what Tim was saying. Yes, booking in advance and getting those confirmations and those commitments and don't go to Vegas right now because there's no space. Or you can be a small meeting. You just can't be. You can be a small, medium, large or I hear they're offering good deals. So so that's what I would tell you is if it's not signed, it's not it's not confirmed because they still have to rely on their systems. And right now, since they're understaffed on the sales side, know that that signed contract is the only way to guarantee that you're in their system. Don't. Even though you have you might have the longest relationship with that hotel sales manager. They they could be gone the next week. And right now everything has to be signed in my opinion. So. So yeah. Got it. So so David, I have a question. We're talking about signing contracts and getting committed spaces. Have cancellation policies changed. Have they become more egregious or are, you know, are the hotels letting people cancel or liquidated damages? And what's the experience now? What we're seeing is real interest in clients really looking at what those mean. And every sentence and every clause where years before they would just sign it and say, no problem, we're going to figure it out. And now it's a lot more lawyer time, a lot more council time trying to negotiate every line in there for the larger events, for the larger venues. They're just saying no. Like they don't want to change it. They don't want to lose that revenue. Tim, what you said smaller events have a little more leeway. It seems like they're trying the venues, trying to fill some of those gaps, that a big show isn't going to be able to set up and come in for. So 1 or 2 day meetings are going to have a little bit more leeway, but we're just seeing a lot more focus on it as it goes. And I'm starting to see most of our clients. We are corporate shop. Most of our corporate clients are nervous about getting back in. Our clients at least are nervous about getting back into in person. So we've still seen our cancellations pushed through 2022. And so it's like they'll get to the contract, they'll read it, they won't want to risk it. And they'll say, you know what, we're just going to do virtual again. We'll look at this and we'll book for 2022 2023. And so that's what we're seeing is they'll see it. They don't like it. They don't want to make the they don't want to make the call. And they'll push. And so that's kind of what I'm seeing is that the venues it might not change. It might not have changed a lot, but it definitely is much more of a focus. Got it. And Wendy, this is a question to you. Do you see people deploying with masks and and maybe sending out to their attendees some expectation and having optical things on site where, where they kind of reinforce safety. Is that something that you've experienced? Yes. I mean, our client I mean DC, you know, we service, we're a global company. So it's different everywhere you go. Right. And so it's it's what we're seeing is definitely, you know, communicating with our attendees on, you know, being vaccinated like you have to show proof of vaccination. And really looking at those optics of, you know, how the venues are set up and communicating. The live events that we've worked on have been a tremendous. People are ready, they're ready, they're ready to go, and they're happy to give whatever they need to to attend. And it's been very it's for me and for my team has been very heartwarming to see how the response as and people coming back and, and the level of like people are hugging each other. It's just it's really so they have zoom burnout. Oh my gosh. People are my clients are ready for live events. There are some, you know, we do a lot of work with the government. So we're still doing the virtual side of it and then our international until things open up a little bit. But you know optics is huge. And over communicating with our attendees to make sure that they feel safe is definitely a number one priority for us and our and our clients. So so this question, I just want to feel it to all of you. And I just want to quick answer. I'm going to start with Cindy. Will hybrid meetings be popular a year from now? Yes or no? Well, they will be if you have enough money. Again, I always compare it to the Super Bowl. The Super Bowl is the only best hybrid event I can think of. Everyone else sucks. I'm going to be honest, I sorry to use that word on your podcast, but it's either they're really great in person or they're great virtually. Because think about it. If you're on a zoom call or if everyone's in person and there's only one person on the zoom call, how much harder that person is on the zoom call has to fight to speak up to get their attention because everyone else is in person chatting and you can't follow along. So that's why. Yep. Got it. Tim. Hybrid. Will they be a popular year from now? I think it would be popular in certain formats, but it is losing entrance across the board. I, I also concentrate on corporate. I think they see some value. It does need to be produced as two different shows to be successful, but it is losing popularity with most of my clients as they want to now give full attention to in-person, especially since in-person is exploding and the attendance and interest is there. So as that interest grows for in-person, I believe the hybrid loses its attraction. Got it. David. Your thoughts? Hybrid will we have of the year from now? I'm going to give a double answer. I think some sort of digital element is here to stay. I don't want to say hybrid because I think everybody is correct. I think hybrids losing interest. It's super expensive to do, right. It's terrible when you do it wrong. But for almost all of our corporate events, digital is going to become an accessibility piece. So it's going to be a required piece. Any event you do live, you'll have a web stream out. So folks that can't make it for whatever reason, for whatever medical reason that they don't have to identify, they can watch. I think it produced feed a switched feed that's that's kind of a one way view is going to be standard accessibility in the next 12 to 24 months. I think hybrid where you have interaction, where you have a whole microsite where you're developing this like virtual show is going to go away. Okay. And Wendy, your your thought a year from now. Hybrid yes or no? I think it is on its way out because it is very expensive. And as Cindy Lo said, you have to do it right. And when it's not, it's it's chaos. So I think it'll be here for the next year as we go out of the pandemic, but definitely fading away less. I shared with you my concept of hybrid sandwich right in February. I wrote about on my blog. Okay, yeah, because that's what I think. Again, I'm still pushing it because even though no one's really picked it up, but I'm like, I'm still pushing it because that's what's going to happen. I think personally, events that are smaller, let's just say 100 people or 50 people gathered somewhere. Sometimes those can be done in on digital format and accomplish the same thing, avoiding travel and all the all the pieces of the puzzle that that really wouldn't have been the case 2 or 3 years ago. But I think events that have meaning are going to put people in rooms together. And I think it's important for platforms to be, you know, cost effective and to be very engaging for a person who can't attend. And we under full disclosure, we and are an investor in Zuddl, stands for Resilient Huddles. And as owners of that product are. So goal is to have the engagement the closest experience for a virtual person and a live person. And that's the actual goal. But there are many platforms out there, and it was just interesting to hear what you all think about the future of hybrid and what's going to be. This is my final question. I'm going to start with Tim. Tim, is it fun to be back in a ballroom in live? Oh my gosh, is it fun? I we did a show last week at Bellagio, and I was a giddy little kid running around the halls there and you know, and during the planning stages as well, it's so much fun. We'll never take this industry for granted again. And I'll tell you, the clients and the village that it takes to produce these shows, all the vendors, we've never gotten more along. Everybody's just working together. It's just like, wow, look what we get to do. And I think we were experienced in 2019, especially those of us that have been in this industry for a while, a little bit of burnout. And so this slapped in the face. So my answer is absolutely. It's it's a lot of fun, a lot of challenges, though, and a lot of things that we now have to look at. But we'll get there. And you know, all the indicators show that this thing is moving forward and in a good way. Okay. Wendy, are you excited to be back in ballrooms? Absolutely. Just that the whole networking and just seeing the happy faces, it's just I'm over the moon. Over the moon. David, we're back in a ballroom. What are your thoughts? Yeah, I love it. I think there are challenges, but it is unbelievable to be back in person. And I think the best word I have is, is meaningful. And when you're able to bring a client to a hotel property that's been closed for years and they're able to bring back staff, the fab staff, the banquet staff and say, you know, we haven't been able to employ these folks. They've been on furlough because of your event. We're coming back and the tears come in and they want to be producing events. It's just so meaningful to be able to provide that for everyone. As we go into these venues. And it's not one venue, it's happening over and over as we start to go back in person, Cindy, take us home. What is exciting about being back together for live in ballrooms and venues? Yeah, no 1,000% excited. I mean, I echo everyone from ten to Wendy to David on everything they've said. And yeah, despite my feet hurting like I literally thought I wanted to sell them off after F1 last weekend. Oh yeah, I was. So I literally pinched myself. I was like, oh my gosh, that felt so good. And I was running on no sleep because we were going from one big event to the X and I was like, oh my gosh, this is why I do this, because I loved seeing the magic come together. And for all the people that got to attend. So absolutely, 1,000%. Do you know, Wendy and all of you articulated the reason we're in this business to be in what we do? You have to love it. It's got to be, you know, integral part and to be without it. It's like they withheld some oxygen for some period of time. Now we get to breathe and realize why we're in our business and why we love it so much. And that's such a good way to end this discussion. I want to thank all of you, Wendy. I want to thank David, Tim and and also Cindy, and I think you all are amazing. I look forward to seeing you in a ballroom, a convention center, a venue someplace. I'm glad, Cindy, you didn't saw your legs off. And and this is Les Goldberg and The Road Ahead. Everyone, let's get back to work. Thank you. Thank you, Les.