Concessions to Ask for in Your Hotel Contract

Are you getting the most out of your hotel contracts?

If you're stepping into hotel or venue contract negotiations without a strategy for optimizing your concessions, then this article is for you. 

Concessions aren't a one-size-fits-all solution. You must prioritize securing concessions that not only meet your event needs, but also add value to your attendees' experience.

In this article, we'll outline concessions you should consider in your hotel contract negotiations, helping you save valuable time and resources.

Short Summary

• A concession in your hotel contract signifies a special perk or advantage offered by the hotel for your event.
• Some typical concessions found in hotel contracts may consist of reduced room rates, waived room rental fees, or adaptable cancellation policies.
• You should always research what concessions are already offered by your hotel or venue before negotiation (so you don’t ask for concessions that are already free). 

What Are Concessions in Your Hotel Contract?

A concession in your hotel contract refers to a specific benefit or advantage provided by the hotel to your event. 

Your concessions can take various forms depending on the negotiation and the specific terms outlined in your contract. 

What Are Common Concessions in Your Hotel Contract?

Some common examples of concessions in hotel contracts include discounted room rates, waived room rental fees, or flexible cancellation policies. 

Concessions are often included to incentivize you to choose a particular hotel for your conference or corporate event. 

Concessions to Consider

Before entering negotiations, it's important to understand the hotel's business practices and typical concessions offered. Instead of presenting a generic list of requests, tailor your concessions to align with your group's needs and the hotel's operations.

Here are some important concessions you should consider when negotiating your hotel contract.

1. Flexibility in Booking and Cancellation Policies

According to Knowland, 89.7% of event organizers think that offering flexible hotel contract terms is very or extremely important. 

Understanding Timeline and Financial Obligations

When you sign your agreement, remember to consider the timeline and financial obligations associated.

Consider the following scenario:

• If your event is set for January 2025 and you sign in May 2024, you'll be responsible for 10% of the contract from the signing date until September, totaling $80,000.
• This amount increases to 40% from September to October, reaching $320,000, and then to 70% from October to December, totaling over half a million.
• Any cancellations made between December and January will incur a 100% cancellation fee, totaling $800,000.

As the event draws closer, cancellation fees increase significantly due to potential damages.

Negotiate For Actual Damages Incurred

Another approach might be negotiating actual damages instead of accepting a 100% cancellation fee. Remember, negotiating your hotel contract is not about arguing; it's about having a constructive conversation.

Some agreements may outline that if a cancellation occurs before your event date, the cancellation fee is not fixed at 100%. Instead, the agreement only requires payment for actual damages incurred. This may involve providing evidence of costs such as scheduled labor and purchased food.

2. Room Block Adjustments and Amenities

There are many areas within your room block up for negotiation in your hotel contract. 

From reducing attrition to elevating the VIP experience and refining room block arrangements, you have to pick which areas are most important to your event and attendees before negotiations.

Attrition

Attrition is a clause in your hotel contract that outlines the expected room revenue that your group commits to utilizing and paying for. 

We advise our clients to advocate for cumulative attrition at the lowest feasible percentage in their hotel contracts. These days, achieving 80% is typically the best you can do.

When negotiating your contract, try to extend your event's cancellation policies to the latest possible dates, to help minimize your risk. Hotels often have clauses that require additional negotiation for more favorable terms, so it's crucial to push for extended deadlines to provide flexibility in managing any cancellations.

For more information on what attrition entails in your hotel contract, read our article on how to avoid paying attrition fees. 

Elevating the VIP Experience

Ask your hotel what they can do for your VIP guests. Below are some common questions we ask to tailor our contract accordingly:

• How many complimentary suite upgrades are available?

• What options are there for early check-ins and late check-outs?
• Do they offer complimentary limo transfers for VIP guests?
• Is there exclusive lounge access that can be extended to our VIPs?
• Are there complimentary welcome amenities such as gift baskets, champagne, or personalized notes for VIP guests?
• Do they offer dedicated concierge services for VIPs?

For example, if you have 10 board members joining your 500-person event and they prefer larger suites, you can request suite upgrades specifically for them.

By strategically negotiating, you can secure benefits that cater to your board members' preferences.

In addition, if early check-ins or early check-outs are needed for the 10 rooms (especially if there are extra charges involved), the hotel should be able to easily arrange these accommodations considering the scale of your program.

Room Block Adjustments

Additionally, you should ask about the possibility of including a contracted room rate extension. 

This clause allows event managers to reserve rooms at the negotiated discounted rate for a specified period before and after the main event dates (typically 3 days before the event and 3 days after), subject to hotel availability.

Examples of additional rooming concessions you can discuss with your hotel sales manager include:

• Considerations like 1 complimentary room per 30 or 40 rooms booked
• Credit for rooms booked outside your block. We recommend this type of clause that requires the hotel to cross-reference your event’s registration list with the hotel's reservations.
• Ensure the lowest room rate is guaranteed for the main event days
• Exclude the nightly resort fee associated with each room 

Turndown Service and Room Drops

Other potential concessions to consider include complimentary turndown service and room drops

Also, if your group consumes a significant amount of bottled water or coffee in their rooms, negotiating discounted rates for either could be beneficial to your event budget. 

Spa Services

If the hotel or venue has a spa, consider negotiating a 10% discount on services for your event attendees. You could also propose a 20% discount for all event attendees who book in advance for additional savings. 

This arrangement not only supports the hotel in selling spa services but also demonstrates added value to your attendees. 

3. Food and Beverage Concessions

As an event manager, you want to focus your budget on elements that directly enhance the attendee experience. There are numerous avenues within F&B where this can be achieved. 

Negotiate for the lowest possible F&B minimum to minimize financial risks, especially when considering multi-year contracts.

Early Menu Submission Benefits

Certain hotels offer incentives such as discounts if a group submits their menus generally 30 or 45 days prior to arrival. If this information is not clearly defined in your contract, it is unlikely that a discount will be available after the contract is signed. 

By locking in your food and beverage selections early, hotels can better plan, schedule labor, and order products needed for your event. 

Chef, Labor, and Bartender Fees

Another fee we often encounter is when hotels charge for chef fees, which can vary based on menu structure. However, if you have a higher food and beverage minimum, you should negotiate to have all chef and attendant fees waived. 

Labor charges for small events (coffee breaks or F&B events under a certain threshold) are another cost to consider. Typically, hotels charge labor fees for events below a certain attendee threshold. Negotiating these fees away, particularly for smaller functions, is a great way to cut back on extra costs. 

Bartender fees are another consideration. You might include a clause in your contract stating that if your event generates a certain amount of revenue, these fees will be waived. 

However, the structure of these charges varies; some package bars include bartender fees while others charge separately, so it’s important to know how the hotel or venue operates.

It's smart to research the concessions your hotel already offers before diving into negotiations. If the hotel doesn't usually charge for certain items, there's no need to ask for them to be waived. It saves time and makes your negotiation efforts more focused!

Maximizing F&B Minimums

Ask if you can include all food revenue sources in your F&B minimum calculation, including banquet services, room service, and any hotel-owned food and beverage outlets. 

If your program is larger and you have affiliate bookings that will attend your event, think about asking to include these events in your overall F&B credit. For example, if you bring in XYZ company and they book F&B with the hotel in their banquet area, the revenue from their booking could be counted toward meeting your contractual F&B minimum. 

Room Setup Fees

Lastly, when discussing room setups, particularly for smaller meetings, if the venue charges fees for this, it's a good idea to ask if they can be included in your concessions. 

While F&B arrangements typically cover this, it's important to confirm and request it as a complimentary service if needed. If the hotel usually charges for this service, it's a good idea to bring it up during negotiations.

4. Meeting Space Concessions

When negotiating your meeting room space, we recommend asking about the possibility of waiving the rental fees entirely. 

Some hotels may automatically waive meeting room rental fees based on the F&B program your group brings in. However, if a hotel is asking for a F&B minimum and room rental fee, consider your F&B spend. 

For example, if the hotel offers a F&B minimum of $250,000 and a room rental fee of $50,000 and you know that you will spend $400,000 in F&B (note: remember service charges and taxes are not part of the F&B minimum) consider negotiating away the room rental. 

Additionally, if the hotel has reader boards or monitors available for advertisements, be sure to request featuring your event's branding on these displays at no extra charge. Some hotels may have a fee for this service, so incorporating it into your concessions is a good idea.

5. Vendor Discounts

When negotiating with the hotel, it's worth requesting discounts on any services provided by their in-house vendors (if they have any): 

1. Audio/Visual (A/V): Negotiate a flat discount of 10% or 15% if you opt for the hotel's in-house A/V supplier.
2. Linens: Some hotels offer multiple choices of linen tablecloths, each with varying costs. Negotiate to include linen choices at no additional charge in your contract.
3. Decor: If the hotel has a preferred vendor for decor, inquire if discounts can be offered.
4. Exclusive Services Such as Electrical or Rigging: Request discounts on electrical or rigging services if applicable to your event setup.
5. Internet: While many hotels offer complimentary Wi-Fi, it's still worth negotiating for any potential discounts should your event require dedicated internet services or services beyond free Wi-Fi.

6. Additional Thoughts on Concessions

When booking a venue for the first time, you might want to consider including specific meeting conditions in your contracts. For instance, you could ask to have scheduled monthly check-in meetings with the Director of Catering or Director of Convention Services starting six months before your event.

These concessions are always welcomed in our books, as they give you greater visibility and access to the leadership of the hotel. While these conditions may not be needed for future events, they can greatly benefit first-time events or events in a new venue.

It's important to evaluate how the hotel handles your requests and questions during your site visit. Working with venue staff who are adaptable, cooperative, and dedicated to making your event a success is key. 

Ultimately, the hotel you choose to host your event should make contract negotiations a smooth and satisfactory process for both parties but remember it’s a two-way street and mutual respect is key to the success of your event.

Frequently Asked Questions

Why is it Important to Negotiate Your Hotel Contract?

It is important to negotiate with hotel for added concessions for many reasons:

1. Cost Savings: Securing added concessions such as discounted room rates, complimentary meals, or waived fees can help you stay within budget and result in significant cost savings.
2. Better Experience: Negotiating added concessions can enhance the overall experience for you and your conference guests. Whether it’s upgraded accommodations or complimentary amenities, these benefits can add to the conference experience.
3. Customization: Concessions allow you to tailor the contract to better suit your specific event needs and preferences. 

How Do You Negotiate Your Hotel Contract?

Negotiating the best hotel concessions requires you to do some initial research on how the hotel operates, and then strategically align them with your event needs.

Avoid the mistake of sending a lengthy, generic list of concessions to the hotel and hoping for approval.

You need to be mindful of what your program is going to benefit from and figure out what is being charged by the hotel, how the hotel does business, and what is already complimentary. Don’t go into the negotiation asking for concessions that are already given for free.

Also, remember that this is a negotiation. The hotel needs to benefit from the items you request, so keep in mind that sometimes a laundry list of requests could work against you.

Do Concessions Offered By Hotels Vary?

Yes. Concessions can vary dramatically depending on the season and the hotel's current availability. When hotels need business, they offer more concessions to entice bookings. 

On the flip side, when larger events like conferences or sporting events are already happening in the city, hotels may offer fewer concessions since demand is already high.

Can You Give an Example of Concessions Offered by a Hotel?

Typically, concessions offered by a hotel include upgraded accommodations, waived fees, and discounted room rates. Here is a list of concessions offered by a hotel that we recently received a proposal from:

• Hotel planner points
• 85% attrition with an allotment of 15% slippage for the guest room block
• 10 upgrades to VIP guest suites at a discounted rate
• Group rates are available 3 days pre- & post-dates based on availability
• Waived room rental or room rental fee waived once F&B has been met
• Complimentary wireless internet in meeting spaces and guest rooms
• Complimentary self-parking
• No resort fee
• 10% discount on spa services
• 10% discount on A/V if using the in-house provider

Hopefully, this provides you with insight into some common concessions offered by hotels, empowering you to enter your meeting ready to negotiate for the ones that best suit your event.

We recommend that you negotiate for value while maintaining a balanced approach. Look for fair concessions that benefit both parties without coming across as overly demanding. 

Need help negotiating your next hotel or event contract? Let’s chat about how GoGather can help you drive more value from your events.