5 Tips for Negotiating Rates and Concessions - Groups360

5 Tips for Negotiating Rates and Concessions

by | Jul 6, 2021 | Planners

If a planner isn’t well versed in the art of negotiating hotel contracts, unexpected costs can arise, and many freebies end up left on the table.

The second in a series of Full-time Insights for the Part-time Planner, we’re going to talk about getting the best group hotel rates and concessions packages for your next meeting.

1. Understand the difference between group and transient rates.

In hotel industry parlance, transient rates refer to leisure travelers, as opposed to group rates, which apply to meeting attendees. Transient rates include those found on online travel agencies (OTAs) such as Expedia or Travelocity.

It’s been a long-term trend that group rates tend to be lower than transient rates. The only time transient rates might be lower than group rates are when a hotel is selling a less desirable room or needs to sell a few last-minute room nights.

Group rates may be especially favorable during the post-pandemic recovery, which should only change if demand begins to outstrip supply.

During rate negotiations for room blocks, both hotels and planners tend to consider the overall meeting value and seek additional deals through waived meeting room rental fees and various concessions. (More on that in a moment.)

2. Be transparent about your budget.

As negotiations typically go, you can expect the hotel to offer the highest rate they hope to get from your group in order to drive revenue. Knowing the estimated market rates gives you an edge because you’ll know whether the proposed rate is typical for the season and level of occupancy.

You may be getting a great rate compared to the market value, but you can also lob the negotiation back to them by asking for a lower rate, even if it’s just $5 per night.

The best thing to do, however, is to be upfront about your budget. An unfortunate fact of the hotel industry has been a long-standing lack of transparency in pricing, which erodes trust and makes for inefficient negotiations when planners and hoteliers need and want to work together.

You don’t have to be secretive about what you can afford in order to get the best deals. Setting a tone for transparency will help you and your hotel sales partner ensure you’re both satisfied with the agreed upon rates.

Read more about negotiating hotel rates for group rooms.

3. Ask for rebates.

As opposed to a discounted rate, a rebate is a certain amount from guest room rates that gets credited to your master bill. This approach works when guests or meeting attendees are paying for their own rooms.

For example, say your group rate was $275, but attendees are used to paying around $300. You can raise the rate to $285 and have the $10 rebate from each room night credited to the master account to offset other costs, such as food and beverage.

4. Request concessions that fit your needs.

Many part-time planners are missing out on some of the best perks that come along with booking a group at a hotel: concessions.

Concessions are any number of comped items packaged according to the size of your group and the overall value of your meeting.

Hotel concessions include:

  • Complimentary room nights
  • Upgrades to executive suites
  • Complimentary happy hour
  • Comped meals at on-site restaurants
  • Free valet for day delegates
  • Beverages and snacks for your office
  • VIP transfers to and from the airport
  • Waived fees for shipping and pallets
  • Points to the planner’s loyalty account

Want more ideas? Check out this company’s wish list of 45 concessions, ranging from rooms and rates; attrition, fees and billing; and meeting space and audio-visual. 

The complexities of an event — rooms on peak, strength of room-block pickup and your rooms-to-meeting space ratio — all affect the package a hotel will offer.

To maximize concessions, be sure to give the hotel sales staff as much information as possible so that they have a full picture of your event. Be upfront about your preferences, and avoid asking for concessions you don’t actually need.

5. Choose the right time to negotiate.

Given the devastation induced by the pandemic, many hotels have struggled to stay afloat. Those that have survived have been generous and flexible in order to win group business.

As an example, many hotel sales executives have reduced or waived attrition and cancellation clauses. (See Part 3 in this series for more on attrition.) Hotels have offered unusual concessions such as paying for carpeting the convention center ahead of a trade show.

Under better circumstances, however, hotels have more negotiating power, especially during days and seasons of high occupancy.

Here’s an insider tip: Close your hotel contract at the end of a quarter or end of the year. Hotel sales teams want to meet their numbers by those dates and are more likely to give you better packages to seal the deal. Booking two-year or multiyear deals can also win you larger concession packages.

For access to further education, mentorship and peer insights into meeting planning, consider joining Meeting Professionals International (MPI) or another professional association if you haven’t already. You will gain access to a network of people ranging from executive assistants who plan small meetings part time to professional event planners who stage citywide conventions for thousands of people.

You can also skip the hotel contract negotiation altogether and book your smaller room blocks and meetings in a single online transaction. Find out how with GroupSync Engage.

For more in the Full-time Insights for the Part-time Planner series, check out 3 Tips for Better Hotel Negotiations and 5 Tips to Avoid Room Block Attrition