Negotiations in the Hospitality Industry
MeetingNews conducted a survey of 321 planners to assess their style of negotiating. The results reviewed in February 2007 were as follows (Krantz, 2007, p.1):
Among Corporate Planners:
60.7% - Quote actual figures and see if the property can service the meeting well at that price
32.2% - Quote figures close to actual budget, then negotiate aggressively to get better terms
7.1% - Ask for too much in some areas, then make concessions in return for better terms in other areas
Among Association Planners:
67.7% - Quote actual figures and see if the property can service the meeting well at that price
26.0% - Quote figures close to actual budget, then negotiate aggressively to get better terms
6.3% - Ask for too much in some areas, then make concessions in return for better terms in other
areas
Negotiation Preparations
Whatever negotiation strategy you adhere to, you are more likely to be successful through preparation. You can prepare for negotiations by doing the following:
Know the bottom line.
Before entering any negotiation, calculate what the bottom line is. How important is the transaction? What are the costs of not successfully negotiating a deal? Establish a bottom line to establish boundaries around the negotiation. This analysis gives the insight as to how much to concede before it is better to walk away.
Samuel Tepper in Professional Meeting Management advocates that for every negotiation that an overarching objective should be to build your relationships. This suggests focusing on the transaction at hand and also adopting a long-term perspective in assessing the bottom line.
Research, research, research.
Information is power. Collect as much information before starting any negotiation. Use conversations with the other party, website information, company annual reports, etc. to help collect information.
Your research also includes fully documenting the meeting. Historical information will help a meeting manager effectively negotiate.
For suppliers, the Destination Marketing Association International’s (DMAI) Meeting Information Network (MINT) serves as a repository of information about association and corporate meetings. MINT along with other sources will provide information about meetings and the potential revenue.
Be prepared.
Before negotiating, know exactly what are the requirements and associated priorities. Be ready to articulate what is important, its relative importance and why it is important. And also anticipate what the other side will have on their list. Compile a list of their wants and need. Tepper calls this the RINT™ or Ranked Items the Negotiation Table™ Analysis. Anticipate counter-proposals and compromises and think about how to react to each.
Adopt a mind set that is not adversarial.
This preparation will create a focus that is centered on the other party, not solely centered on you. The more a meeting manager can put themselves in the other party’s shoes the more likely the negotiation will be successful.
Pre-meet as appropriate.
The proper preparation for a negotiating requires time to ask questions of the other party and to complete research. Plan to ask for time or an advance meeting before negotiations to ask questions. This allows time to be more focused on the other party and to more fully understand their positions, requirements, wants and motivations.
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