20 Jan Demystifying Event Contract Negotiations
There are a few key points to consider when negotiating event contracts. Taking the time to familiarize yourself with these variables can help you understand the value of the products and services you’re negotiating. In turn, you’ll know where you can be flexible – and where you need be firm. The more you know at the outset, the more confident you’ll feel at the negotiating table.
The Basics of Event Planning Contracts
Here are our tips on getting the most out of contract negotiations, whether you’re working with a standard contract that only allows a few points of negotiation, or you’re drawing up a bespoke contract that allows for more back-and-forth between a vendor and your team.
Know Your Vendors
The more you know about your vendors, the more negotiating tools you’ll have at your disposal. To start, know how they’ll make money from your event. If you’re organizing a trade show and plan to move heavy freight, your general services contractor is going to make money on labor. If your event has a large food and beverage use, you know the venue is going to make money on catering.
Also know the value you bring to the negotiating table. That, of course, is the revenue from the event itself, but can also be any number of items – from that hefty F&B tab or a packed hotel to plenty of high-profile exposure that generates repeat business from attendees.
When sourcing vendors, know which core competencies you need and expect. These vary by type of supplier and the scope of your event. For example, a general services contractor should be able to provide excellent service in these basic areas:
- Labor. This includes accessibility to good-quality labor and proper management of labor.
- Shipping and material handling. This should include knowledge about the best solutions and affordable options for your event.
- Design. Vendors should be able to provide high-quality options with quick turnaround times.
- Exhibitor services. These include a maximum 24-hour response time, skill at answering questions, politeness, and a solutions-driven approach.
Before you choose a vendor, take the time to think about what core competencies you expect, and find out whether a potential vendor is committed to meeting those expectations.
Navigate the Process with Confidence
Start with the venue – your biggest spend – then work your way through the rest of your vendors. Having a clear handle on your budget up front will help guide you toward the right venue. Don’t waste time on venues that are clearly outside your budget. You may be able to get a break on the venue cost if the dates of your event are off-season, but beyond that, don’t expect extreme discounts that will bring costs down to fit within your budget.
Where possible, start with venues’ online portals to submit your requests for proposals (RFPs). Some vendors’ portals will walk you through all the steps of the process. The online RFP process is intended to help streamline bidding, and the convenience this provides to your potential vendor is something that can factor into negotiations. If you work within their system, they may be more likely to reward your requests.
Get multiple bids and take your time navigating the negotiation process. That’s tough to do when the event is just around the corner, so start planning early; the farther in advance you begin planning, the better your bargaining power. You will find more venues and dates available, which will give you a chance to make comparisons and have more freedom to say “no.” The more you know, the more prepared you’ll be, and the more confident you’ll feel in negotiations.
Here are a few standard bargaining chips you’ll have at your disposal when negotiating with a venue:
- Comp or bonus rooms. How many hotel rooms do you want comped per block? Know this number up front, as well as whether you have an event large enough to warrant a bonus meeting room.
- Days in and out. If you have special AV setup needs, determine that schedule in advance so that you can negotiate room setup, labor availability, or equipment storage, if needed.
- Guest check-ins/outs. As with the AV or room needs, be sure to note any special guest arrivals or departures, as these may need to be part of negotiations.
- Special diets. You’ll want to know these in advance to ensure you’re aware of any extra charges that may be on the table.
- Guest amenities. From edible welcome treats to nightly turndown service, hotels are often happy to discount luxury amenities in an event contract.
A note on Wi-Fi: This is typically offered in-room and in conference spaces, since public areas are free in many of the larger hotel chains. Do your research up front to determine what is standard at a property before viewing this as negotiable – it may be that it’s already free in-room or property-wide.
Make Sure Your Final Contracts Are Clear and Comprehensive
While there are often more discounts and concessions with a bigger total event spend, have a clear idea what you expect vis-a-vis non-negotiables and protective clauses when going in, whatever the size of your event.
Non-negotiables vary by type of supplier and venue. One absolute when it comes to non-negotiables is a No Walk clause, which must be included in every hotel venue contract. This clause protects your small group from being walked out to another property to accommodate a larger group.
When it comes to protective clauses, be sure the contract includes the basics, such as limits of liability and force majeure (to remove liability for natural and unavoidable catastrophes that keep obligations from being fulfilled).
Hotel attrition clauses can require you to pay for the rooms you book in a block, even if you do not use them. Don’t be afraid to ask for a cut-off date or gradual reduction in room block to avoid an attrition clause, regardless of the size or value of your booking.
Be sure the contract has strong terms and conditions. The terms of a contract should include firm beginning and end dates, and should also clearly state payment expectations, including the ramifications of not paying on time.
When reviewing the contract, be sure that wording is clear and there is no ambiguity; pay attention to the tenses of words and sentence structure and look for legalese that clouds meaning. Revise any unclear wording into simple terms and ask that the lawyers reviewing the document explain changes thoroughly, including why something was changed. Don’t let a vendor pressure you into a quick review of the contract; if their demands are unreasonable at that point in negotiations, consider whether it’s a vendor you want to continue on with.
The bottom line: It’s all negotiable. Whether working with a venue, caterer, rental company, or other vendor, know what you need and want going in, and don’t be afraid to ask. After all, that’s what negotiating is all about. When final contracts are clear and well thought out, the result is a collaboration that gets you closer to a winning event.