Hotels

Episode 2: Hotel/Venue Traps to Avoid

Have you ever considered taking your event out-of-state? Do you already travel around the country for your events? Today’s episode is all about making your out-of-state event a success! Charles & Lisa talk to Gina & Anna of Nexstar Network, a member-owned organization that helps educate, coach, and train business owners in the trades. Their events move to new locations each year, so they give us tips on picking locations, how to maximize your dollars with the venue, and which partners should travel with you. Contact: Ginab@nexstarnetwork.com, Annar@nexstarnetwork.com, or check them out at www.nexstarnetwork.com

 

HOW DO YOU PICK THE CITY YOU WANT TO HOST YOUR EVENT?

We look at the downtown area. Our CEO, Jack Tester, loves a vibrant downtown. We want places for our guests to be able to walk to, fun activities for them to do, and great places to eat and see. If not, we want a shuttle near by or other transportation. We look at the quality and service of a hotel. We are not loyal to a brand, but lately we’ve been liking J.W. Marriott & the Hyatt for our larger events. We also check the distance from the hotel to the airport. We do not want our guests to land and then have to drive two hours to get to us. Also, meeting space. We need so much space. We’ve put together a calculation a few years back. It is 34 square feet per person, which is a lot, but we don’t want to feel uncomfortable. Then, we have a list of things we’ve used in the past that we will need, like a meal space, break out spaces for each department, etc. and we reference that for every event we do.

 

HOW ARE YOU FIGURING THIS OUT SINCE YOU ARE LOCATED IN ST. PAUL? ARE YOU FLYING TO THESE CITIES, DOING A LOT OF RESEARCH OR WHAT?

We have hotel reps, which are like Account Executives for each hotel brand, that we use. We put together an RFP, Request For Proposal, with all of our needs (room nights, meeting spaces, etc) and we send that to the hotel reps and from there they will recommend a hotel and send us availability. We do not like using third parties, because we really like having those personal relationships with the hotels reps. Also, the third-party gets commission, which causes the hotel to see our business as not so lucrative for them. Plus, the loyalty that develops when you are working with the same person year after year creates a great working relationship.

 

ARE THE HOTEL REPS VERY RESPONSIVE OR..?

The hotel reps are amazing! It is working with the actual hotel that can be hard. Like some hotels we can’t get into, because we don’t have enough room nights, so they won’t even look into our proposal. Like Austin, TX, we really want to get into there, but you need a minimum of 1,000 room nights to get in there and we are at about 7-800. Nashville and Austin are really hard to get into.

 

DO YOU EVER GO TO LOCAL BUSINESS/CITY BUREAUS, LIKE MEET MINNEAPOLIS, TO GET INTO A HOTEL OR CITY?

That is more like a DMC, Destination Management Company, which we could go to, but I don’t think they have as much pull as the hotels. Sometimes, the hotels will actually use them to try to win our business. One time, we went to meet with the hotel and they had a rep from their local city bureau ready to share with us why they think their area would be a great fit for our event. So they work more with the hotel to get us than with us to get the hotel.

 

ARE YOU WORKING WITH A NATIONAL REP FROM THAT HOTEL BRAND OR ARE YOU CALLING LIKE THE CATERING OR EVENT MANAGER AT A SPECIFIC HOTEL TO WORK THINGS OUT?

We work with a national rep. When we’ve narrowed down on a few hotels, our rep will put us in contact with the right person at the hotel.

 

HOW DO YOU START THE DIALOGUE WITH THE NATIONAL REP AND WHAT DO YOU DISCUSS? HOW MUCH DETAIL DO YOU PUT IN YOUR RFP’S?

Before we send those out, we’ve met with our national hotel reps several times. So they know our business and what we are looking for. Then, the RFPs go into further detail about what we need for that specific event. Like, the space outlined, what class are taking places, how big those classes are, any breakouts needed, hours of the class time, any concessions that we are really hard on, and room block details. Like how many king or queen rooms we need. We are very specific about that. If it is a management level event or a technician level event we need different styles of rooms for our guests. We get a lot of questions back from the hotels about that, but it helps us to weed out what hotels are going to work for us and which won’t.

 

HOW DO YOU DETERMINE WHAT YOU NEED IN A HOTEL BLOCK?

We have a really good formula built up. We look at how many people are budgeted for each class and then we take 30% off the top. We’ve noticed that about 30% of people either don’t come, already live in the area, or they share a room. A lot of our technicians will want to share rooms to save on costs. We have not gotten into any attrition, that’s the thing we don’t want to get into, because we contract so many events across the country that we want to be good stewards of our members money.

 

DO THE MEMBERS PAY YOU OR THE HOTEL DIRECTLY?

They pay the hotel. We orchestrate everything and do the negotiating. Two new things that we are doing in our RFPs this year is that we are asking for a 2% rebate to our members’ master account, because a lot of hotels want to show on paper that there room rates are a little higher, which is okay, and if we don’t have any wiggle room for the room rates we can at least get a credit to our members at the end of it. Also, we are going to give preference to the hotels that give us 75% attrition vs 80% or 90%. The other thing I wanted to throw in is AV. We do lay those details out in the RFPs. For our smaller events, we will use the local AV company, but for our larger events we are happy to say that we use EideCom!

 

I’VE HEARD HOTEL NEGOTIATIONS CAN BE PRETTY FIERCE, CAN YOU TELL ME ABOUT THAT?

I see it as a challenge. When we start the proposal process with the hotels you begin a relationship with them. I know that we are a great piece of business and our members are a fun group of people. Hotels love us on site. Our guys are great and we are going to bring them a nice piece of business so we are asking for some back. It helps that our hotel reps know us. We don’t cancel, we fill our blocks, we spend way more money on food and beverage, we overflow our blocks, our members like to go out, drink, and spend money.¬†We ask for a lot of concessions. Like, F&B, food and beverage, which we usually ask for 20% off the top. We might not always get it, but something is better than nothing! We can’t negotiate plus plus (the tax that hotels charge). We have a list of about 25 concessions that we always ask for. Like, a two-way cut off for our hotel block, which gives you two weeks prior to the start of the event to book your room at the negotiated rate. But, if the block fills, the hotel can do whatever they want. For the most part, they will honor the negotiated rate if it is in the two-week mark. So we try to negotiate two weeks prior. We do 10% off AV. We do 80% attrition and this year we are giving priority to the 75% attrition. We do discounted staff room rates, meeting planner points, welcome amenities, suite upgrades, and more. We also have a lot of contractual addendum’s. Like, a mutual cancellation policy. So if I cancel on the hotel, the amount is the same as if the hotel cancels on me. We’ve never had to cancel an event, but if we were to, we want to be protected. Or if the hotel decides to cancel on us, we are in a really bad situation. We also do a meeting space clause, which means the hotel cannot move us without our written permission. We also do a no walk clause. Some hotels, if they over book they will bump you, so this clause states that if they over book they have to bump other people and not our members. We also do not pay for meeting space. We work it into our food and beverage minimum. Another tip to save money: negotiate that all your packages will be delivered for free! Hotels will charge you hundreds of dollars if you get something delivered there.

 

HAVE YOU EVER DEALT WITH UNIONS?

Oh yes. We’ve had a lot of issues with unions, so that is something we look at upfront when we are selecting hotels and venues. If they are union, we do a lot of research and look at their history, because we have been burned, where the management staff is amazing, but the banquet staff (the staff that is union) that has to execute the work won’t follow through, so we end up being on site labor. Plus, the prices you pay at a union hotel are crazy! We try to avoid unions. We do not want to pay the extra fees. The plus plus is enough. As a rule of thumb, we estimate plus plus to be a minimum of 32%.

 

WHAT IS NEGOTIABLE?

Food and beverage and AV for sure. Especially, if you have history with the hotel and can prove your F&B budget and room block, they can work with your budget.

 

WHAT OTHER THINGS HAVE YOU LEARNED TO NOT OVERLOOK?

When you start negotiating, always look into your rigging costs. Any type of license or permits that’s needed from the hotel side, like if you need a security guard or someone overseeing stuff, that can be upwards of $5,000, so I ask for the production guidelines from the hotel before a site visit and send that to EideCom, or the production team, and they let me know what the event will actually cost. That way you are not getting a surprise bill later on.

 

WHAT ABOUT THINGS LIKE POWER AND INTERNET?

I ask the hotel right away what that will cost. For internet, we do not provide wi-fi for all of our members, because it is crazy expensive, like $50,000. We do provide it for the production team and we put it out at the registration desk and then we negotiate wi-fi in members room. So they do have free wi-fi while they are there. We don’t want them on their phone all day anyways, but we do have a lot of members ask about it.

Another thing to check when you are negotiating is construction. It is always good to know if there is any planned construction and what they can do to work around that for our guests. It is also important to know who else is going to be at the hotel. We don’t run into this problem very often, but with our smaller events when we aren’t taking up the majority of the hotel or meeting spaces, you do not want to be in a room next to people having a party when you are trying to have a focused, thinking time with your group, which has happened to us. We ended up having to move rooms overnight.

Another thing to think about, we like to contract out a year and a half to two years for our really big meetings.

 

ARE THERE ANY CITIES YOU WOULDN’T RECOMMEND?

Las Vegas and New Orleans, because there are so many distractions. We still go to New Orleans but we are more thoughtful about where we go and what our itinerary is. Also, Canada is hard, because now you need a passport. But once we get there, everything is so much cheaper.

Another thing we think about is the¬†weather. Like, don’t book an event in Florida during hurricane season. We’ve thought about having an event here in Minnesota, but there is no hotel that is big enough for our Super Meeting. We would have to book two hotels, one for overflow, and we don’t want to do that.

 

LET’S TALK ABOUT THE THINGS THAT YOU THINK ARE THE MUST DO’S FOR PLANNING AN EVENT OUT OF STATE?

  1. You have to do a site visit for a large meeting. See how people treat you, how the food is, what does the meeting space look like?
  2. Check the cost of flights! If it is hard place to get to, like there isn’t an international airport nearby and flights alone are $1,000, people probably won’t want to pay that, plus a hotel and more.
  3. Location. You don’t want to be in a weird or unsafe area that makes your guests uncomfortable
  4. Put together a check list that is full of things that are important to you and your business and make sure everything checks off while you are there! It’s a process to put together a good contract, but when you give it the time you need the outcome will be so much better. Have a very detailed person and even a lawyer look over it.

 

ARE THERE ANY BIG RED FLAGS YOU SHOULD BE AWARE OF WHEN TALKING TO A HOTEL?

For the most part, the hotels want your business, so they won’t try to pull a fast one on you. I would just be sure to look at the cancellation policy.

It is key to build trust between you and the hotel reps and staff!

 

WHY DO YOU CHOOSE TO WORK WITH A PRODUCTION COMPANY THAT WILL TRAVEL WITH YOU INSTEAD OF THE IN-HOUSE PRODUCTION CREW?

We want a team that knows our content, our people, the way we think, our membership, so that we can work easier together and the level and quality of equipment that a production company, like EideCom, owns is so great. On top of that, there is a level of trust that builds. We trust you guys to take care of us and our members. And honestly, it is not that much more expensive, if any at all!

All of our vendors leading up to a big event, we are very loyal to them and they are very loyal to us. Events are all about the little details, so for us, we have so many things going on, it is such a load off of us to work with people who know all the little details!

 

Contact: Ginab@nexstarnetwork.com, Annar@nexstarnetwork.com, or check them out at www.nexstarnetwork.com

 

 

Meeting Minds by EideCom