The most frequently used venues for membership organization events are hotels. This is true of single day events as well as multi-day conferences.
If your organization has professional management, it’s important to let the professionals take the lead on hotel selection and negotiation. They have the experience and skill set to negotiate a good contract and hold the hotel accountable. There are many cases where a well-meaning volunteer approaches a hotel and negotiates a contract. The risk of overpaying by thousands of dollars is very real. Once the contract is signed, there is no going back to get a better deal. The information that follows is to give you an idea of what goes on behind the scenes, and what meeting planners need to take into account when doing their work. While it may seem effortless, the process is complex.
Full-service hotels have banquet space available. The number and size of the spaces will vary with the size and type of the hotel, and the type of clientele that it serves. In general, the more urban the hotel, the more banquet space. The fancier the hotel, the higher the price.
Hotels give their best banquet pricing, often even waiving rental fees, if the organization has a multi-day event that involves sleeping room rentals. Still, hotels are a viable choice for one day events or even one meal events. Meeting planners develop RFPs in order to get bids for events.
Hotels are often booked months and years in advance, so it is important to book well in advance. Weekends, especially in wedding season, are the most problematic in terms of scheduling. The pricing will be higher with most hotels for weekend events. The season of the year can have a huge impact on sleeping room rates. The best pricing for multi-day events can be found mid-week with the exception of business focused hotels. Another factor considered is the number of rooms needed, and whether this is a single booking or multi-year booking and the relationship between the organization and the hotel. Hotels give their best pricing to repeat customers.
Hotel meetings require contracts and they are generally very similar from chain to chain. Negotiating a hotel contract is an art and a skill to be learned. Generally, the sleeping room rate, banquet room rate, required number of rooms, AV, parking, late check out and cut off dates are negotiable.
Room attrition rate refers to the percentage of sleeping rooms that must be booked to avoid penalties. Most hotel contracts start out with 90% attrition. This means that by the cut-off date, the group must have occupied 90% of the rooms committed. If the group has not done this, then the remaining 10% of the room revenue to the hotel must be paid by the organization. A good negotiator can get this down to 80%, but rarely lower. This is why it is important for the number of rooms guaranteed to be realistic. It is only natural for groups to want to secure rooms for more guests than they had at a previous event. This kind of thinking, however, can lead to attrition that can do major damage to the organization’s fiscal health. It’s important for boards to understand this. Do not ask your management to over-estimate the number of rooms needed.
What happens if the number of people wanting to book rooms exceeds the room block? When this happens, the meeting planner will contact the hotel and ask them to extend the block. Often, this can be done. However if the hotel is full, then the hotel staff may help the meeting planner find additional rooms at nearby hotels.
It is possible for very small groups to get by with something called a courtesy block. Typically this is ten rooms that the hotel agrees to hold until a set date well in advance of the event; they provide these rooms at a reduced rate. There is no penalty to the organizer if these rooms are not all used.
Attrition can also apply to food and beverage, although food and beverage is frequently specified in terms of minimums. If you over-estimate the number of attendees, you will have the chance to adjust the number downward a specified time out from the event. If attendance is uncertain, it may make sense to reserve a large space, but commit to a very realistic number of attendees. That way you can add without maxing out the room. Hotels typically will let you exceed your count by 5-10%. Some charge a hefty penalty if you go over your count. Buffets typically have excessive food, but if you try to low ball your count, the hotel will charge you for actual attendance over your count. You may also find you run out of plates and silverware.
Another factor impacting the price is whether the meal is plated or a buffet. In general buffets cost more than seated meals. On the other hand, there are good reasons for offering buffets for breakfast and for any event involving Continuing Medical Education. Generally, breakfast meetings include some leeway on arrival time, and having the buffet ready to go whenever people get there is a great way to ensure everyone gets fed quickly. For any event involving Continuing Medical Education and if funding from the pharmaceutical industry is consolidated and used to fund the event, a buffet is required. The Sunshine Act does not require disclosure of meeting attendance if there is a buffet and if the funding is aggregated.
Bars can be cash or hosted. If hosted, it can be a flat fee based on the number of hours or per consumption. With a cash bar the attendee pays, and with a hosted bar the organization pays. If the attendees are heavy drinkers, then a flat fee per hour per person is best. For groups with few drinkers then per consumption is the way to go. If you want to hold costs down, go with the basic package, but expect some comments about “cheap stuff.” The middle choice is a better choice, with recognizable brands. For more affluent groups, the high end is the way to go.
Another factor to consider is that the cost of AV can be quite steep. The big advantage to using hotel equipment is that the hotel assumes responsibility. With many hotels, there is an added fee for bringing in one’s own equipment and the hotel has no liability should it malfunction. If the fee for bringing in outside equipment is minimal or there isn’t a fee, then the organization should consider whether to risk using their own equipment. Equipment owned by management is also an option. Management can often use its discount to get significantly reduced pricing on hotel AV.
