OSSN E-Agent Newsletter

When it comes to working with hotel contracts, the biggest lesson that I have learned is that just about everything is negotiable, from commission to attrition. Negotiating will frequently involve a series of inquiries and conversations between the hotel, yourself, and your client before an agreement can be reached. This process may take several days to several weeks. The bottom line in negotiating is that the hotel needs to make a profit on the business and, at the same time, your client is assured to pay a reasonable price and you end up making equitable commission for servicing the group.

To put yourself in the best negotiating position, first check competitive pricing, including online sources, as well as the hotel's Web site to make sure you are being offered the best group rate. Once you have negotiated the per night cost, request a clause in the contract that, if the hotel lowers rates during the group's stay, it will offer those rates to your group. Unfortunately, hotels that sell rooms to hotel-room wholesale Web sites, such as Priceline or Expedia, cannot control the prices offered via those Web sites once they have sold the rooms to the site.

Here's what is usually negotiable:

Net or commissionable rates

Several contracts that I have received came in at the room rate that I wanted; however, they were net rates. I was able to go back to the hotel and negotiate a commission without raising the rate.

Complimentary rooms

These rooms are typically offered by the hotel on a "one for 50" basis -- that is, the 51st room is free. This is also negotiable, but be specific on how this will be calculated. It is to your advantage to have complimentary rooms calculated on a cumulative basis. That is, you should receive each complimentary room as the room pickup increases, calculated by adding all rooms booked by attendees for pre-conference, conference, and post-conference dates.

Staff rooms

Hotels may also offer complimentary or discounted rooms for staff.

Upgrades and social functions

Suites, room upgrades for VIPs, complimentary cocktail receptions or coffee breaks, etc., can also be negotiated. For one of my groups, I actually negotiated to have the hotel include a welcome amenity for each room on my behalf as well as private check-in.

Family plans

A family plan indicates the hotel's policy on charges for children staying with parents. Many hotels offer no charge for children under 18 years of age when they stay in their parent's room. Make sure this is in the contract if you feel that there may be families in your group.

Pre- and post-conference rates

Negotiate pre-conference and post-conference rates for guests wanting to come in before and after main room block dates. This can assist your group in meeting the attrition requirements.

Meeting room rentals

Meeting room rental charges are negotiable and can be waived, especially if you are securing a good number of rooms at the hotel.

Attrition fees

Think of them as insurance for the hotel that you will commit to paying for a specific number of rooms within your contracted block of rooms. Attrition fees ensure that the group's business will produce a specified minimum of revenue -- either by using the rooms or by paying the difference between the number of rooms that were contracted to be used and the number of rooms that were actually used. The percentage of attrition (reduction from contracted number) will be stated in your contract. The typical attrition policy is 10 percent. This means you can reduce your group space by no more than 10 percent without penalties. Example: If you have 100 rooms blocked, 90 would meet your commitment. But, if you end up with only booking 85 rooms, your group would be responsible for paying for the five extra rooms, even though they were not booked.

Don't be timid about asking for adjustments and other concessions, as hotels will expect negotiations. But, to be successful, you must negotiate from a position of having all of your facts in hand beforehand.

Anita Pagliasso-Balamane serves as OSSN's Western Regional Manager. She's just produced a new CD titled "Anita's Toolbox for Home-Based Agents" which contains dozens and dozens of her most popular forms, letters and guides. This CD allows you to download her MS Word documents for your own personal use and customization. To purchase the CD or her book "How I Made a Small Fortune as a Home-Based Agent," go to www.redticketproductions.com.

[Note: This article was published previously in Agent@Home Magazine.]