In a conversation over dinner with Joan Eisenstodt, a leader in the hospitality & meetings industry and a knowledgeable resource in contract negotiation, I learned meeting planners often receive one page contracts and sign on the dotted line; the contracts are a meeting disaster waiting to happen without the inclusion of very important food and beverage or space details. Intrigued, I told Joan I wanted to talk with her more about contracts and essentially, “pick her brain” to share and teach others about what to look for in a contract and the signs of red flags. A month later, Joan and I spoke again on the subject – this time with ten fingers feverishly typing on a keyboard and a phone glued to my ear…
What are the main clauses to look for in a contract?
[JOAN]: Specific space and dual cancellation clauses. “A client almost signed a one-page contract for a meeting for 200 people. They said, “Joan, what do you think?” People think that a long contract isn’t necessary; it doesn’t matter the length is, it should be inclusive of all the terms. It’s a complicated process.
What are red flags in a meeting contract?
[JOAN]: Non-specific language. Any contract that says something could or may be charged with no specificity – you should negotiate the amount in that case. Joan’s examples of non-specific language:
- Is the venue a smoking property? Attendees could be allergic to smoke, this needs to be on the contract as a smoke or smoke-free property either way.
- Up to 15 staff members can receive 50% off their room night. It’s either 15 or it’s not and what dates does that apply to?
- Round-trip transportation provided from the airport to our DC hotel. What airport? There are 3 in the DC area!
- For catered events, contracts should never be based on “Chef’s choice”. Again specificity is the key.
What do you feel strongest about when it comes to meeting contracts?
[JOAN]: When a facility sends a proposal, it’s not negotiated, it’s not a contract, and it’s not signed. If a hotel promises a certain service in a proposal the facility considers a contract such as an on-site restaurant or a bar and it closes – one could consider that a breach of contract. And though it’s covered by law, I prefer to have cancellation, termination, and attrition clauses spelled out with specific dates and dollars not days out and percentages.
Meeting planners must ask, “If x happens, what will happen to this contract or the performance of the meeting?”
If you consider your contract negotiation on a worldwide level, what’s happening in Japan could impact vehicle parts and operations for a facility’s transportation, food supply and availability, and electronic parts for al the tech devices we use. If there is an airline or trucking union strike, your meeting may be impacted if participants or speakers or supplies cannot reach the meeting destination.
When most people negotiate a rate at a hotel or at a conference center whether a la carte or Complete Meeting Package (CMP), they tend to look at the given price. They should consider taxes, service charges, other fees and when and whether those charges will be increased. The price of food is going up worldwide. Someone said they negotiate food prices 9 months to a year out, which is great for the planner and not for the venue.
Today, it’s about looking at the whole package and understanding what exactly you need, why, and what’s important to you.
Joan said “If I look at a site for a client, I will note specifics they need for their meetings. The facility may say that the group can have that space only if they move the meeting by a day or pay a different rate. When you look at proposals and negotiate contracts, know your priorities and know where you can negotiate.
Top 3 non-negotiable should be…
Specific meeting space named and shown on an attached diagram; dual (not mutual) cancellation clause; and specificity of information. No one wants contracts where terms and language are open to interpretation; it can make for a very sticky situation.
When I think of specificity for a meeting contract, I think about how people buy smart phones or appliances: you don’t buy the case; you buy the case, features and service. Too many groups will contract with hotels and vendor services without knowing and contracting specifics for their meetings.
Thank you for the fabulous interview Joan! You not only enlightened me with your knowledge of contracts and the negotiation process, but as you always do with an abundance of ways the hospitality industry is intertwined into events happening on a larger scale across the globe.
Joan, a hospitality and meetings industry consultant, trainer and facilitator, is willing to send her contract negotiation checklist to anyone who emails her at firstname.lastname@example.org.
As either a supplier or planner, what do you feel the strongest about in a contract? Do you have any have red flags to be aware of in meeting contracts? Share them below in the comments section.