Meeting News - August 11, 2008 - (Page 40)

chapter 1 2008 meeting planners handbook Contracts: How to Read Them, Write Them, And Avoid Costly Mistakes I f you’re like me, contracts aren’t necessarily your specialty. Now, I think I’m a good, studious planner, but between marketing our boutique trade shows to the right audience, navigating the logistics of organizing a meeting, and retaining appropriate speakers, giving the right amount of attention to that half-inch-thick stack of contract papers starts to weigh pretty heavily on my mind. Sign on the dotted line…but read this first Do I actually consider every sentence in every contract clause, you ask? Well, not always. Planners may find themselves overlooking important hotel contract details for any of the following reasons: q Language barriers. Most meeting planners don’t have formal training in, for lack of a better term, “legalese.”The language can be mystifying, making it difficult for planners to really understand what they are reading. q Limited knowledge. If a planner doesn’t know what items are regularly negotiated, the need to pore over a contract becomes much less compelling. However, that planner is missing an important opportunity to control events. q Lack of time. Short turnaround times and complicated logistical matters can get in the way of reading detailed contracts. q General assumptions. Supplier contracts are not standard, and they should be tailored to group attendance history and buying power. q Limited assistance. Planners should familiarize themselves with attorneys who can help them. It’s important to protect yourself, your group, and your organization from unnecessary risk. If that means asking for help, do it. Calculating Ancillary Spending A friend of mine was planning an event that included booking 50 rooms per night at a chic hotel in Manhattan. Knowing that I am in the habit of reviewing hotel contracts, she asked me to have a look at the one provided by her supplier. Room rate? Check. F&B? Check. But when I got to the cancellation clause, the penalty looked astronomical (even for New York City rates). As I crunched the numbers on the actual per-night sleeping room rate and other charges, it was clear that there was something else built into the cancellation clause that she was not contracting for. I had to dig, but eventually I found the culprit: ancillary charges. For my friend, the hotel had included in the cancellation penalty nearly $10,000 in such expected revenues—for a 170room contract. Ouch! But ancillary charges present an interesting dilemma for planners, and not just in cancellation charges. Some savvy planners have turned the tables, calculating the ancillary spending at their events and using that same category of charges to their advantage in the negotiating process. Especially 40 MeetingNews August 11, 2008 Planner’s Checklist What are ancillary charges when it comes to hotel revenues? At our 2007 Successful Meetings University – California event, David Peckinpaugh, president of the San Diego Convention & Visitors Bureau, gave us an insider’s guide. He defined ancillary charges as David Peckinpaugh those from the following hotel outlets: u Restaurants u Lounges u Gift shops u Recreation As you prepare your program, can you think of any other ancillary charges that are special to your meeting? www.meetingnews.com http://www.meetingnews.com

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Meeting News - August 11, 2008

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