From the beginning of the process of site selection through the facility contract negotiation, a Professional Conference Organizer (PCO) can help you choose the right facility and get the best deal.  A qualified PCO will provide added value in this process, based on having extensive experience in working with various facilities and having been involved in negotiating numerous facility contracts.

Once you’ve selected the venue for your event, which terms and conditions of the facility contract can and should be negotiated?  If you wanted to build a house, would you know what permits, building codes and specifications you need to be aware of, or would you hire a general contractor to guide you and advise you through the process?  When it comes to negotiating a facility contract, your PCO is like a General Contractor who will take care of all the details of the contract through successful completion.  Generally site selection companies can negotiate similar contracts but they are not involved in their execution, which is another benefit of working with a PCO.

Negotiating a facility contract is not just about negotiating the best hotel room rate, or the lowest meeting room rental charge.  Risk mitigation is the key objective in addressing all the clauses of the contract.  Depending on the size and complexity of your event, your contract should include some variation of the following:

  • Dates of the Event
  • Room Block (rooms per night, price, cut-off date and method of reservations, complimentary rooms)
  • Meeting Space (named rooms with set-up and capacity, dates and times including set-up, cost usually on a sliding scale)
  • Food and Beverage (policies, spend commitment, pricing)
  • Attrition and Cancellation (policies including timelines and resale)
  • Exclusive Vendor Policies (AV, telecommunications, electricity, catering, rigging – if possible for your flexibility, these should be negotiated out, except if a health and safety case can be proven)
  • Relocation (what happens to your participants if the hotel is oversold)
  • Force Majeure
  • Legal (insurance, indemnification, dispute resolution, assignment, change in ownership, notice)
  • Construction and Renovation Limits and Remedies
  • Performance (reflagging, standards to which the facility must deliver and consequent financial remedies)
  • Over-Performance (incentives for the group to exceed contracted commitments)
  • Riders (additional hotel policies, services and pricing)

In our next Golden Nugget, we will provide some specific tactics to minimize your facility contract risk.

Written by Hélène Lamadeleine

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