How to Make Your RFP More Attractive to Hotels

Introduction:

Sean Whalin (Co-founder and CEO of HopSkip), sits down with seasoned hospitality attorneys Barbara Dunn (Partner at Barnes & Thornburg LLP representing groups), and Lisa Sommer Devlin (Devlin Law Firm, P.C. representing hotels) to discuss strategies for improving the success rate of RFPs in challenging situations.

In this session, of "HopSkip and Legalease With the Ladies" series, they delve into practical advice for event planners facing issues such as poor room-to-space ratios. The experts share insights on how to make RFPs more attractive to venues, ensuring that even short-term and less ideal scenarios can result in successful bookings

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Boost Your RFP Success: Strategies to Make Your RFP More Attractive and Overcome Venue Challenges

Transcript:

Sean Whalin:

How can we improve our chances of getting venues to consider our RFPs more seriously? Despite challenges like poor room-to-space ratios, we're open to paying for function space rental and have a strong short-term business. What additional strategies can we employ besides optimizing our attractiveness with factors like f and b spend?

Lisa Sommer Devlin

Well, as you know, from the hotel's perspective, their profit is driven by selling guest rooms. They don't make as much money and, in some places, don't make any money on food and beverage. And so, if you're having a bad room-to-space ratio, that's why the hotels might not be interested.

So, what you need to recognize is that's where you're starting in your negotiations and then go in and say, we get that by using all this space, you're not going to be able to sell as many guest rooms to other groups and therefore you're not going to maximize your revenues. So, here's how we're prepared to make it up to you.

I think that if you go out of the gate and say we're willing to pay a room rental fee, we're eager to maximize our menus and show them where your value will be. Also, when it's a short-term event that's found business for the hotel, they didn't have anything on those dates, so they should be glad to have your events. So those are the strategies that I would use.

I think you're doing an excellent job with what you're saying that you're willing to make up because you recognize that. And I believe that finding the right venue, who has needs over your dates, is the best way you're going to be able to negotiate these kinds of deals.

Barbara Dunn

I agree with all the strategies you suggested, Lisa, and I would add that this might be a piece of business that is right for approaching a hotel venue that would work and looking at multi-event bookings at a venue.

Again, the more frequency you have, the more likely you may be able to take that benefit and get some breaks at some of the other costs. But I would say with any business, there will be a good side and a wrong side. And the RFP is your opportunity to highlight the good side. But to the extent you disclose what you consider a terrible side, put a spin on it.

Like, yeah, we may be a space hog, but we do these meetings frequently, or we fill in short-term gaps, or we're welcome to return to the same venue, that type of thing. I think that just goes the basics of the RFP. And if you aren't identifying that, I think you should. And of course, to the point made earlier, everyone's busy, there's a lot of response time or lagging and responding to RFP. So, making it easy to go through an RFP process is always your best strategy.

Sean Whalin

Well said, I couldn't agree more. I'm biased, but there were some other, I thought, great comments in the chat, sharing some lessons learned. Sarah mentioned it as one of those bad room-to-space ratio groups. I find being flexible on days of the week helpful, and it seems like a few other folks in the chat also agreed with Sarah. Make sure you capture your history.

Yep, that's also super important for showing two to three years of program history. All right, we are going to now send a poll out to the audience to try and get a temperature read on. How often do you encounter challenges with room-to-space ratios when sourcing hotels for events? You should see the poll on your screen right now. Awesome. It looks like we got responses coming in at the top.

It looks like they encounter challenges with the space-room ratio between 50% and 75% of the time. Yeah, excellent. All right, we are going to, and I'm going to, make sure we share the poll results as well as the deck and the recording of today's webinar early next week.

Again, this is excellent content you guys are engaging in these polls because that will also feed our next webinar. What is the current trend regarding hotels' willingness to accept company addendums without requiring significant alterations?

Lisa Sommer Devlin

I think Barbara and I agree on this one. Having a contract and a group supplement is nothing more than lazy contracting. You should always try and negotiate one complete contract rather than having a contract and an addendum. If you've got terms in your supplement that are very important to you, you should put those in your RFP and say, this is how we want to make a cancellation.

If that's not going to be comfortable for you, let us know or any other special terms that you really want. Instead of just sticking a second contract on the back of the hotel contract and putting that together, negotiate one complete contract. I always give this advice to my hotel clients, so the short answer to your question is I tell my clients not to be willing to take those addendums.

They usually get you in trouble. Even though the addendum says this addendum will control if there's any conflict between the contract and the addendum, it's not always true that it's black and white, which would control how they can be read together. So, from my perspective, don't do addendums. Negotiate one complete contract. Barbara, what do you think?

Barbara Dunn

As you said, Lisa, I wholeheartedly agree with you. And I do agree that you know, and I think this happens a lot in a corporate environment where internal legal may have put together, these are the clauses we always must have. And again, the thought is you attach them to the contract, and it fixes everything. And to Lisa's point, no matter whether you say which one controls inconsistency, there are still things that can't be read together in a way that could make sense. And, of course, those are often the ones that come across our desks by way of a dispute. So having said that, I will say agree with Lisa. I think one clean contract is one thing to focus on, and this is potentially true on both sides.

But I'll say on the group side, if you're working with language that you need or you've been told that you need to have, really seek to get training to be informed on why you need that clause and why it's important and really what issues you need to be addressed, because I find that the folks on the front line that can communicate why we need a particular indemnification clause, why it's important, what features are often in that case, you're successful in negotiating a clause that will work for both sides, because often we're not, you know, pigeonholed in saying it has to be this exact language. We're saying, look, we need to address these specific issues. Right. So, if it's a construction, we need to address the problem we'll discover about construction.

We want to know what you're going to do about it. We want to have time to work through a resolution with you. And if we can't work through a resolution, we want the opportunity to walk away. Often, when you articulate things that way, you can come together on either side with language that will work instead of just having a battle of the clauses.

So, for those of you who might have these internal addenda, I would push your teams to educate and train the group using them so that you can work to integrate them as closely as possible into the hotel contracts.

Conclusion:

By demonstrating flexibility, a willingness to invest in function space rental, and effectively highlighting your business's value proposition, you can establish a strong foundation for negotiations with venues. It is crucial to present a clear and comprehensive RFP that showcases your strengths and addresses any potential challenges upfront.

This proactive approach enhances your credibility and significantly boosts your chances of securing favorable terms and successful partnerships with venues. Remember, transparency, flexibility, and a strategic mindset are critical elements in navigating successful negotiations within the events industry.