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The ideal hotel contract: yours.

the ideal hotel contract: YOURS

If you plan meetings, you've probably had some unwelcome surprises in hotel contracts. Additional charges for electricity used, finding your members got no better than the "rack" rate during conference weekend, and extra costs for quick-turnaround requests are just a few of the unexpected expenses I've encountered.

As the chief staff officer and convention manager of two small associations in Denver, I used to keep a mental list of my groups' special needs and of the things I'd been burned on over the years of putting on meetings. But in time it became more and more difficult to remember everything each time I negotiated meeting space. When the list grew too long, I knew it was time to bite the bullet and write my own contract.

The first time details go awry with a hotel contract you can call it a learning experience, but just when you begin to relax, ban, you get hit with the very same thing a second time. That's when it becomes a planning peeve.

Hotel people must think we're crazy when we come in with our lists of planning peeves. I got so bad for a time that I insisted on tape-recording everything said during a walk-through. I know it was weird, but I did it because a sales manager once promised me simple arrangements that, when I got on-site, weren't made. In that particular hotel, the sales department carried no weight at all with the banquet captain, the golf club manager, and some others who had worked there for years. My carefully planned details went for naught and I became paranoid: thus the tape recorder.

Wishful thinking

Meeting planners can list dozens of things that have happened that they want to avoid for all time. That list gets longer each year, and during hotel negotiations it results in a lot of double-checking to make sure the planner's idiosyncrasies and planning peeves are addressed.

On top of that, we all accumulate a wish list. This is a list of things that may or may not be offered by a particular hotel; nonetheless, we always want them.

Examples are the following: * "We wish all hotels would let us use their plants on our speakers' platform." * "We wish more bellhops would be working when our people arrive." * "We wish our directors could check into their sleeping rooms before noon."

For meeting planners signing hotel contracts, this means many details to be checked, loopholes to be closed, and a fair amount of verbal negotiation pertaining to the wish list when space is booked. Add up the number of meetings an association books over the years and you can see how time-consuming these negotiations are.

You are your own best


Your time as a planner will be better spent if you take a few hours to draw up your own hotel contract instead of relying on wish lists. The good news is that if you use a computer, you'll only have to do this job once. After that, the contract will be good for years: Just fill in the blanks for each usage. I manage the Denver-based Rocky Mountain Bean Dealers Association, which reserves only about 100 room nights once a year. But the RMBDA contract is essentially the same one I use for the Colorado Grain & Feed Association (CGFA), Denver, whose annual meeting is more than five times as big and twice as long as RMBDA's.

Getting started

Starting to write your own contract is the hard part. Here's how to begin.

First, get out a standard contract you've signed with a hotel in the past. Since you signed it, it must have parts you can live with. This contract will be a guide for what goes in paragraph one, paragraph two, and so forth in the contract you design. It will furnish some wording that is generally accepted and, most important, it will contain any changes you may have written in that reflect your group's special needs. As with the standard contract, you should begin your document with a general statement of purpose, including the specific parts of the hotel you'll be using, the dates your group will be there, the number of rooms to block off, blanks for room rates, and so forth.

Next, locate the letter of agreement or contract you have that represents the best deal you ever got. You may have to piece this together from more than one agreement or add in some deals other groups made that you've heard about. I was lucky. A hotel salesperson once gave me more than I asked for, so naturally I used that contract as my prototype. In that case, I had only requested one comp suite but instead received two. Additionally, the hotel gave me a couple of extra days to retain my room at no charge so that I would have more time to prepare for the meeting.

In devising my contract, I had the further advantage of having attended ASAE's hotel training program at the Hyatt Regency O'Hare, Chicago. There I learned what hotels will negotiate and how far they can go for a piece of business.

Lastly, list all the things you never want to get burned on again, plus the items on your wish list.

You now have before you your very own hotel contract. It's in pieces, but at least they're all there. You may be tempted to take the pieces to an attorney and let him or her finish the job, but you aren't that far along. Only you know what you need your contract to achieve, so it's up to you to put the pieces together and think through the wording that is meaningful to hotels and meeting planners. Then you can take your contract to an attorney for polishing and legal wording.

How to tell if you're being


With the pieces before you, compare your wish list to the best deal you ever got. Are there things on your list that are very far removed from your best deal? Are you being unreasonable? Acceptable items on your wish list include a variety of amenities you might like the hotel to provide, instead of just a bare-bones treatment. These will depend on what is important to your particular association.

What may be important to one association's members may not be to another's. For example, since I manage agricultural associations, I stipulate in my contracts that imitation farm products are not to be used in meals, except for special dietary plates. Similarly, if your group is in the fashion or cosmetics trade, for example, you may want to request an upgraded version of the guests' toiletry basket.

Other wish list items might include attractive speaker platforms with overstuffed chairs and plants, instead of the usual draped podium and folding chairs; additional centerpieces for banquet tables; two or three complimentary ice carvings at a special buffet; and, if available, display of your group's name on the hotel's outdoor marquee during your conference.

If you have doubts about your wish list, talk with some of your peers. You might call someone who puts on bigger meetings than yours and someone who has meetings about the same size. By knowing what your peers have been able to negotiate, you establish guidelines and gain confidence.

Some tips for the


Here are some points from my contract that you might use.

Comp rooms. "Comp rooms to be 1 for 50" is standard contract language in Colorado now, but I remember a time when some hotels went to 1 for 100. It's very important that both parties agree on the method of counting to 50. I specify a cumulative tally be used, which means that if you have 30 rooms the first night and 30 rooms the second night, you have gone above 50. Otherwise you may find you get no comp rooms because you didn't hit 50 either night.

I also ask for two complimentary suites for the duration of the convention plus two days. (As I mentioned previously, this is based on treatment I once received from a hotel without even asking, so I know it's a reasonable request.) This is a safeguard for each CGFA president, who usually lives in rural Colorado and has a long drive to our winter convention. It enables our president to arrive early or stay late, depending on the weather.

Quick turnaround. "No charge for quick turnarounds" is another contract stipulation I use. It goes back to the time one of my luncheons was going to be bigger than anticipated at the time of booking, so I requested a room change. We were already using a larger room for a morning meeting, and between the morning meeting and the time lunch began there was more than an hour to make the switch. I talked with hotel officials a few days before the meeting, and they agreed to the move. They never mentioned, however, that it would cost $1,000.

Electrical costs. According to the October 1990 issue of Communication Briefings, a company recently reported receiving a $4,000 charge for electrical power it used during a 20-day meeting. This came as an unwelcome surprise. I pity the meeting planner who had to explain to her superiors what happened. There but for the grace of God....

I have been charged for power used by exhibitors just one time. Generally, the only power used in our show is for lights on displays, which may explain why I'd never heard of such a thing. I was unhappy about paying the charge, but I admit I hadn't read the contract closely enough, so I had to take my medicine. (Now that I write the contracts, it's up to the hotel people to read the fine print.)

Room rates. One of the most embarrassing moments a meeting planner can experience is learning that people walking in off the street are getting a better room rate than convention attendees. With weekend conventions like ours, this is an ever-present danger. To combat it, our contract says that our rates will be the lowest ones available during the dates of the meeting. I also stipulate an extension of the rates one day before and after the convention.

Since contracts are written many years out, it can be puzzling to figure out what the sleeping room rates will be by the time you get on-site. Hotels like to state that they won't increase more than 10 percent a year. Compute that. In five years, that could mean a rate your members just won't abide.

The contract I wrote states that the rates are the hotel's weekend rates at the time of signing the contract or that they are more than $40 below the current rack rate, whichever is less. Although I specify a dollar amount, you may wish to specify a percentage, particularly if you are moving from state to state. A $40 discount in Denver is reasonable but would be laughable in Boston.

When our contract is sent out for bid, I enclose a cover letter asking the property to write in the dollar amount of the convention rates for singles, doubles, and suites, based on the contract stipulations. That way, the real prices are nailed down at the time of signing.

Finally, our contract states that attendees are responsible for their own room charges. This just saves me a few minutes of explaining to the property that we aren't paying for individuals' rooms; nor are we going to pay a fee to hold the block. We allow the hotel to cut off the block three weeks prior to the meeting but include the following term: "None of the rooms shall be released by the hotel without the prior consent of the association."

Bartenders. Another planning peeve I address in my contracts concerns bartenders. Believe it or not, some hotels would rather pour fewer drinks than have adequate bartenders.

Our contract states there is to be one bartender per 100 people if the bar is open for an hour or more and that if the bar is open for less than an hour, there shall be one per 75. We also demand that we not be charged for bartenders. (If you don't make this stipulation, you may wind up paying extra for personnel who are already part of the hotel staff anyway.) This usually gets negotiated because hotels want to cover the wages of bartenders by selling a minimum at the bars. However, when the bar minimum is $100 an hour, we don't have much to worry about. (If a bar sells less than that, we should eliminate it anyway.) Lastly, I also stipulate that the hotel staff shall not put out tip dishes on hosted bars.

Equipment and space. My groups don't pay for exhibit space, meeting rooms, or meeting equipment. Hotels that have to rent equipment will call that to our attention, and we do pay for things they don't have on hand. Convention hotels, however, do have microphones, blackboards, easels, movie screens, and other items they can furnish at no cost to the group.

Meals. CGFA needs to have meal prices locked in when the convention committee first meets. Consequently, I have written into our contract that prices will be guaranteed nine months prior to the meeting. Although the contract says nine months, I wait to ask for prices until we actually need them, which is about five or six months out.

Using the standard hotel contract as a guide, I relent in matters that seem reasonable; although a contract can be tough, it must not frighten properties away. For instance, I perceive as reasonable the extra charge for meal service for groups smaller than 15. The same goes for a 48-hour meal guarantee and that only 5 percent above the guarantee will be served the same meal.

Reservation cards. I stipulate the hotel will send us room reservation cards 90 days before the meeting. This clause says how many will be supplied and that there will be no charge for them. It also stipulates that the cards will be postage paid and imprinted with the association's name, meeting, and dates. Although it has never happened to me, I know some groups pay for reservation cards.

Construction and remodelling. I've also heard of groups having problems because of hotel construction, so I've inserted a statement in our contract that we must be notified of any remodeling or construction at least four months out. We then have the right to approve alternate arrangements or cancel without penalty. Knowing the local hotel market, four months works for us, but you should consider your own situation when authoring this clause.

Dispute safeguard. We have a safeguard in our contract that says in case of dispute, the parties agree to arbitrate in Denver under rules of the American Arbitration Association, Washington, D.C. Arrangements for what action will take place if either party defaults on the contract may be included here as well. Be sure to specify not only that you will arbitrate, but also where the arbitration is to take place and under whose arbitration rules.

Testing the waters

In truth, some hotels may not like your contract, so it's a good idea to mail the contract to just one or two hotels at first. By sending just a few at a time, you won't burn all your bridges. Add a cover letter asking the property to bid on your meeting by filling in the room rates and signing the contract. You'll find they, like you, will cross off certain items and write in others. You may make adjustments based on their responses, but don't lose your nerve. If the contract is what you need and you haven't been unreasonable, stick with it.

The hours you save in negotiations and the grief you avoid from unpleasant surprises will be much greater than the time it takes you to develop and write a standard contract.

The first year I sent out contracts, I found some hotels didn't even bother to reply, even though we previously had used them. You may find properties that counter with a letter saying they'd like to host the meeting but enclose their own standard contract. Those seriously interested in your business will comply with your cover-letter request for room rates and return the contract.

Small groups have clout, too

Even small-association managers shouldn't hesitate to write their own meeting contracts. Small groups can cut some favorable deals, and having their own contracts just makes the process easier.

At RMBDA, for example, we put on a small annual meeting, yet Denver hotels still grab for our business. This occurs despite the fact that we need more floor space than our room block would indicate (which, incidentally, limits the hotels we can use).

Why are these hotels willing to give us 1 comp per 50 rooms, no meeting room charges, no charges for microphones and other meeting supplies, a large supply of customized room reservation cards, and everything else the contract stipulates?

For one, we hold our meeting the first weekend in January, a slow time for hotels all over the country. Two, weekends are typically light in city hotels. Lastly, the first January weekend is especially slow in Denver because the National Western Stock Show begins the following week. (People who are coming to Denver in January like to time their trips to coincide with this show.) These three things help RMBDA negotiate its annual meeting. The promise of an active business for the hotel lounge cinches the deal.

Just make sure you know what your group has to offer that may be enticing to the property: prompt payment, a history of taking its entire room block, an active business for the hotel bar, or the ability to come back again during slack periods. Knowing your association has something to offer enables you to write a favorable contract that hotels will accept. In the final analysis, if a hotel wants your business enough, it will consider your contract, regardless of your group's size.

The many-fold payback

I've used the contract I wrote three times without trauma and feel the effort I put into designing it has paid us back many times over in the long run. It's not that we've had smooth sailing ever since, as the following incident illustrates, but I like the success we've enjoyed in general.

The first year I used our contract, I sent it to about seven hotels (a few at a time). Of the seven, three seemed willing to negotiate using our contract. Luckily, the hotel I most wanted returned the contract with the rates filled in. The property was in Colorado Springs, Colorado, so I made the 80-mile trip to review it with the sales staff face-to-face. I remember asking specifically if they understood and agreed to our contract and got a friendly "no problem" response. The contract was signed and I drove back to Denver quite happy with what had taken place.

Later the contract was sent to the hotel's corporate headquarters. Suddenly it was as though the hotel salespeople didn't think I had been serious about our contract. Addenda began showing up in the mail. We received a number of phone calls from hotel personnel explaining that their corporation "didn't do it like that." I responded by explaining that we had a legal agreement. Ultimately, I gave in a little, the hotel bit the bullet somewhat, and we made it through the convention.

The hotel claims to want us back. We liked the property and the staff (after the problems were ironed out), so we may return - as long as the hotel signs our contract.

Paula Geary, CAE, is executive director of the Colorado Grain and Feed Association, Denver.
COPYRIGHT 1991 American Society of Association Executives
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:hotel contracts for conferences
Author:Geary, Paula
Publication:Association Management
Date:May 1, 1991
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