Negotiating for Small Meetings

Most meetings are small. But there is no need to feel intimidated or think that your business is not wanted: Negotiate and you will get a better deal.

Small meetings are the bulk of the market
Contrary to the myth, about 80 percent of the meetings industry is composed of small meetings (the definition of a small meeting is 100 attendees or fewer). For sure, hotels find that large conventions bring in greater short-term profits for the energy expended in booking them. But the hospitality industry has been seeing a trend in which companies are holding three or four small regional meetings per year rather than the traditional annual national or European conference. Companies can thus cut costs and save money, particularly on travel expenses for attendees, as well as improve the quality of contact with attendants.

Hotels do value small meetings
Small meetings help fill holes between large conventions, called shoulder periods, and especially during traditional slow times. Hotels sometimes find small meetings inconvenient during traditional busy periods, but it isn’t unheard of for a small meeting to be booked then. It depends also on your working relationship with the hotels and if your company is already a client, you can definitely leverage on this.

In general, your guest rooms should take up about 15 to 20% of the entire hotel. This size of meetings, even if it is not the deal of the year, strongly helps the hotel in its yield management, helping it go from 60 to 80% occupation if business is low (or from 80 to 100 if business is OK).

Centralise bookings of your meetings
With smaller, more frequent meetings, there is an opportunity for the meeting planner to leverage his negotiating power by booking all regional meetings with one hotel brand or a limited selection of providers. With most hotel companies, it is possible to book these multiple meetings through one point of contact — a benefit to both the meeting planner and the providers. If you have several small meetings, then negotiate all of them all at once at one property. Consolidation helps in negotiation.

Negotiate, even if your meeting is small!
Your negotiating power is a bit lower if your meeting is small, but if you think carefully about your negotiation, you can get better conditions. Remember that negotiating is not only about lowering prices, but also about getting extras such as extra wait staff for a reception, or the use of other facilities such passes to use the fitness centre, or even a few free parking passes for conference staff. Use your imagination and then ask.

When negotiating, you can:
– Guarantee multiple meetings with one brand / provider or repeat business (commitment to hold next year’s meetings with the same hotel brand).
– Let the hotel company know you’ll encourage employees to select their hotel brand as the brand of choice for individual business travel.
– Think of reasons why your event is interesting to the hotel: are attendants an interesting target market for the hotel (meeting planners, travel managers, executives?)? Will the event be published in the press (in which case the hotel would benefit from this visibility)? Etc.

Think of the profit margin on each type of product
Many meeting planners think that if their meeting requires extra services like AV and catering, they will get a great discount. It is only partly true. Hotels make most of their money selling rooms. Providing these other services (meeting rooms, AV, cateringÂ…) is mostly an added value to get people to stay overnight. A full-service hotel can have a profit per room of about 60 to 85 percent. For food and beverage, the profit is about 35 to 40 percent. The meeting space rental, though, is close to 100 percent profit. That is why a suburban hotel would want access to its meeting space for weddings and other special events at night and on weekends, which limits the space used for small meetings.

If you book most of the meeting space with few or no guest rooms, then the hotel might have to turn away business that requires guest rooms and meeting space. On the other hand, if you need space within a month or so. Hotels will be glad to rent you any leftover meeting space rather cheap — and you might not even need to book any guest rooms to get it.

Hotels are often willing to accept such meetings in the short term. A short-term booking — less than 30 days’ notice — provides the best opportunity for planners to book a one-day meeting at their hotel of choice.

Look for alternatives to large city hotels
Many meeting managers are used to hold meetings in large convention hotels when they should be thinking about holding their small meeting in smaller properties or properties that are a bit out of the way, such as an airport hotels. Also you can consider small hotels: Certain hotel brands make a concerted effort to attract and cater to smaller meetings. After all, not every brand or individual property can accommodate large meetings.

Also you can consider other sites: conference centres, universities, historic sites, etc. You might also consider holding a videoconference or a conference call, a meeting held completely on the Web and accessed at an “attendees” convenience.

If you have the flexibility on meeting dates, the best thing to do is consider holding a meeting during a hotel’s “need period,” when hotels can be more flexible because any business at that time will help the hotel’s revenue. Hotels often know when these periods are six to 10 months in advance. It is important to remember that there will always be hotels looking for small meetings business.

What you need to know
You will have to do some preparation before negotiating. Here’s what you need to know before sitting down to negotiate room rates for your next event:
– how many guest rooms you need
– an average of the property’s weekend, seasonal, one-time, group, and even hot-date rates
– prices that other groups in your industry have been paying for guest rooms for similar meetings
– special rates over your meeting dates, which you can learn about by calling the hotel

Create an average high and low room rate from this research, and you will be in a better position to manage your negotiation.

Avoid giving the hotel all your meeting requirements up front in order to be helpful or demonstrate goodwill — you will lose negotiating leverage. Provide only the basic information necessary to move to the next level, or trade your information for something you need to know right away (such as whether the meeting space is available,3), before talking about guest rooms.

Take the time to do your research, gather your information, and prepare your options — and you’ll have more negotiating power.