An essential characteristic in order to persuade someone toward your benefit, is to be or at least to appear knowledgeable around the subject. If you just know one side of the story, chances are your arguments will be full of deficiencies and easily challenged. So, before negotiating with hotels, do your homework. Find out what matters to them, what their main source of income is and turn this knowledge into leverage.
Its key to know how much the hotel can profit from your event and how they value it. Below we have outlined some interesting points around the financial value of assets for hotels, as well as some tactics that are always good to keep in mind.
Room = F&B
The revenue from rooms and from F&B is nearly equal in group-focused hotels. But here, the trick is to understand the cost of delivery for these services. For F&B the cost is about 65%, whereas the direct cost to deliver rooms is 24% of the revenue they bring in. Most planners instinctively request a discount off the F&B. The hotel still has to cover the costs and achieve their profit margin, so this probably means that your portions will be smaller and the quality lower. A more efficient option is to discuss this with the chef and allow him to create a custom menu according to your budget.
Many planners use the fact that they have booked out the hotel’s restaurant as leverage in their negotiations. Now it is becoming more common for hotels to house restaurants they don’t own. First do your research, before using this argument for your negotiations!
Negotiate for Amenities
You can negotiate for specific amenities to be included in a contract for free or at discounted rates. Examples include free parking, free local calls, Internet service, access to the health club, room upgrades, airport transfers, and the use of hotel props and décor. Hotels have a small profit margin on these services, so its likely they will be more flexible in providing them at a discount or free of charge.
Often planners request that contracted gratuities are removed. Here you should keep in mind that these gratuities are paid for by the hotel if they are included in a staff compensation contract. Being aware of this possibility will just give you better insight to negotiate more effectively.
It is very useful to know hotel occupancy rates and peak periods. Obviously you have stronger negotiation power when the market demand is lower. Peak periods are common knowledge but it is not always easy to know if there is a big congress or event taking place . Using a tool like Azavista Analytics can help you to determine these periods and identify the best dates for your event with just a click of a button.
Dare to ask and don’t rush
A golden rule in business is never make assumptions. Always clarify and ask. Even if your request seems a bit far fetched, go for it! Asking never hurt anyone. Be clear about what you want and also make sure you don’t end up with something you don’t.
Patience is a virtue. Once you have made an offer, wait for a response before making another one. By waiting, you avoid the possibility of rejecting your own offer and making further concessions in a revised offer. Also by not being patient, you will encourage the other side to delay its response in the hope of getting a new offer from you.
Get it in writing
You are negotiating on the phone and after about half an hour your supplier agrees to give you what you want. Not so fast! After the call send an email politely asking him to put the previously agreed items in writing. This will help you avoid the “he said, she said” drama and more officially seal the deal.
Listen & Collaborate
The best talkers are even better listeners. Hear the other side out and see if there is any common ground that can help in your negotiations. See if there is a way that both sides can work together and satisfy their needs. Showing some genuine interest to help the other person out ( i.e. empathy for a difficult boss) can really earn you some points!
Finally, it is imperative that you know exactly what you want beforehand. There are many examples of planners who continue negotiating beyond their needs and end up with less than they started with. Keep the negotiations in line with your objectives.