Are there any reasons to negotiate a multi-year contract for your group? Why do it or why not?
Historically – you typically sign a new contract for your annual meeting one or two years out due to the size and scope of your meeting, but have never signed a multi-year contract, so why do it now?
Assumptions – first let’s assume some items you like about the convention hotel you are negotiating with currently. The number of rooms available plus the size and arrangement of meeting rooms are very conducive to your agenda. Also, your venue choice is located where you know your attendees will register. They like the hotel and it is easy to get there by auto or airline.
Known Facts – your hotel choice is one that you would like to use. They have obviously been superb in the past or you’ve had great recommendations from other meeting planners. Other reasons could be due to size restrictions. Your group may be so large that this hotel is one of only a few that will accommodate your convention or it is strategically located near something vital to your program, like a specific plant tour, downtown activities or maybe a golf course that your attendees prefer. Also, your hotel choice has offered room rates that have been in the range that works for you and your attendees.
Likes and Preferences – so, if all the assumptions and known facts are correct, we can now discuss why you might want to negotiate a multi-year contract. Let’s specifically talk about three great reasons.
Preferred Set of Dates – your hotel has what you need in the way of size and sleeping rooms, plus meeting space ideally set up for your group, so it is extremely important to sign a contract when those elements are available to you. If you hesitate or procrastinate, the possibility exists that another convention might sign a contract for dates before, during or slightly after your preferential dates. In this case, some of your preferred space or rooms might not be available and you are out of luck.
Better Room Rates – package deals offer stability to the hotel with guarantees of filled rooms versus lower occupancies and missing budgeted projections. So, to attain those guarantees, hotel sales managers usually offer multi-year contracts with package room rates. The package rates are lower than they would offer by negotiating two separate contracts, one year after another. Hence, your attendees reap the benefits of lower room rates and are pleased with your negotiation skills. If you are booking a corporate piece of business, the lower room rates give your budget a break. Either way you come out on the plus side with better room rates.
Special Contracted Items – however, don’t forget to request that a few little perks be included in your contract. Check out the possibility of additional amenities, complementary rooms or suites. The sales manager anticipating a signature for a multi-year contract might be willing to add something to your contract to entice you to sign. You are booking out further and you should get additional benefits in the contract because of your multi-year contract.
Summary – there are definite reasons to negotiate and sign a multi-year contract. After your assumptions and known facts have been agreed on, the rest of the multi-year contract is a “Win – Win” for you and your hotel of choice. The hotel gets guaranteed occupancy and revenue to meet next year’s budget plus a better idea of how to plan for future years. You get better room rates, plus the preferred meeting space and dates that you want and need. So, consider a multi-year contract when all the factors point in the right direction.