Chapter 11 Study Guide 3 Negotiation is the process by which a meeting planner and hotel representative or Supplier reach an agreement This should always be used when making any type of arrangements Win Win vs the real Winner win win is when both parties feel satisfied about the outcome while the real winner is when one side enters a negotiation and at the end they get the deal they were looking for Dates Rates and Space you can only have two The planner can get the dates and meeting space he or she wants for a meeting but may have to give a little on the rate Do your homework have an Idea of what you are strvivng for when you enter the negotiation Also learn as much as you can about the other side Keep you Eye on the prize make sure you keep you goals the main focus Leave something on the table It may provide an opportunity yo come back to later and renew the negotiations Don t be the First to Make an offer Letting the other person make the first move sets the outside parameters of the negotiation Bluff but don t lie When there s a roadblock find a more creative path Thinking outside the box often leads to a solution Timing is Everything remember that time always works against the person who doesn t have it and that 90 of negotiation usually occurs in the last 10 of the time allocated Listen Listen Listen and Don t Get emotional Letting emotions rule a negotiation will cause one to lose sight of what result is important Information to know about your group Profile of attendees History Flexibility Alter program format revise space requirements release 24 hour holds Change arrival departure pattern Contracts An agreement between two or more persons consisting of a promise or mutual promises that the law will enforce or the performance of which the law recognizes as a duty The essential elements of a contract are Offer by one party Acceptance of the offer as presented consideration Offer Can be terminated in three ways o Expiration of specific time o Expiration of reasonable time o Specific revocation by offeror Hotel or other venue is usually the offferor o Written agreement proposed by hotel after negotiation Meeting Sponsor becomes offeree o Typically a counteroffer is made Acceptance Acceptance unequivocal in same terms as the offer Acceptance must be communicated to the offeror Acceptance must be communicated to the offeror using same means as the offereor used Offer made in writing acceptance must be in writing Price negotiation and paid for the agreement Generally money paid for the other party s promise to perform certain Consideration functions Can be exchange of mutual promises barter Must be based on whether the act or return promise results in a benefit to the promisor or a detriment to the promise Important that both promises be legally enforceable to constitute valid consideration Oral vs Written Better to have a written document Agreements that must be in writing not performed within one year of agreement A valid written contract must contain o Identity of the parties o Identification of the subject matter o Terms of agreement o Statement of consideration Addenda Many contracts especially meeting contracts contain addenda prepared at the same time or sometimes subsequent to the signing of the contract In cases where the terms of an addendum differ from those of the contract the addendum prevails Types of Contracts Agreement with hotel and or trade show facility Ancillary services Temporary Employees Security Audio visual equipment Destination Management Etc Negotiating Contracts Go into the negotiations with a plan Have an alternative location or provider Don t assume anything Beware of language that isn t specific Don t accept something because its pre printed Look for mutuality in the provisions Never give one party the unilateral right to do anything Meeting contract provides package of funds to hotel Never sign a contract where major items are left to future negotiation Specify special room rates for staff and speakers Provide ability to cancel without penalty or damages Cancellation payment specified in dollars and based on hotels lost profit not lost revenue Measure lost room revenue sales against normal occupancy for particular time of the year not against hotels capacity Contract Provisions Attrition Clauses performance or slippage Provide for payment of damages to the hotel when meeting sponsor fails to fully utilize the room block specified in the contract Cancellation Costs Provides for any damages that could be incurred if a cancellation were to happen This protects both parties involved Termination force majeure or Act of God Prevents either party to terminate contract without damages if fulfillment or obligation is not met Includes such things such as strikes weather transportation Four methods of Resolution Privately and informally Give up possibility of reaching a solution and walk away from the problem Go to court and sue Resolve the dispute through other means Arbitration Means of settling disputes without the courts Designed for quick practical an inexpensive settlements Minimal of pre trial procedures Parties also agree that the results are blinding and cannot be appealed to a court Legal issues Be concerned about company and reputation Everything needs to be negotiated in the contracts Bartenders dressing a certain way etc Concerned about acts of God hurricanes Concerned about national and local laws union and labor unions when can you serve alcohol etc Be specific Concerns of different groups within a contract Terms rack rate published rate or fee for room for 50 of rooms sold less than rack rate Occupancy rates NO MATH NEEDED just know the a night basics of it o National averages is the lowest on a Sunday highest on a Wednesday 67 of revenue is room revenue you want to book hotel rooms that have beds in them that s where money is Remember the adage Dates Rates and Space you can only have 2 Must be flexible in scheduling On food and beverage won t make a lot of money off of coffee and danishes hotelier will want to book full scale meals want to have them eat dinner with you every night Parole evidence evidence of oral agreement used when can t understand written parts Attrition clause performance or slippage clause Don t actually show up with number of people promised when they reserve all those rooms Cancellations damages paid to the hotel can happen to both parties though Risk management Preparedness Mitigation Response not everything is in