Feeling obligated to use a venue’s in-house vendor on their terms? Don’t be! Venues design their prewritten contracts with commissions and profit in mind, so it’s in the venue’s best interest for a meeting planner to unquestioningly sign on their dotted line. Read on for how to empower yourself throughout the venue selection process and during negotiations.
If you elect to use an in-house vendor, understand that the venue will make extra money. For example, in-house AV providers write monthly checks to their hotel for upwards of 50-65% of their top-line revenue. AV commissions are often the most profitable revenue stream in a hotel’s P&L statement.
Use this knowledge to your advantage. Request reduced rates or increased perks in other areas, such as a discount on sleeping rooms. You benefit the venue by choosing to use their vendors and pay a higher price; use this as leverage.
Not interested in using an in-house supplier? Preferred vendors offer several benefits, such as a dedicated and familiar team, cost-saving strategies, a broad range of technology, and more. You can always advocate to have your own trusted people work on your event. Here are three steps you can follow to make sure you have the upper hand.
1. Include a Preferred Vendor Clause in Your RFP
Consider adding a preferred vendor clause in your RFP, RFI, or RFQ documents. This starts the process on your terms; the venue will know going into negotiations that you want to pull from your established network. Below is example clause you can revise and add to your RFP. It is focused on AV providers, but you can use similar text for food, florists, DJs, etc.
Audiovisual Services: Due to the unique nature of our members and our meeting program format, CLIENT NAME has a long-term partnership with an AV provider that is familiar with the needs of our members. We will plan to utilize their services for much of our unique audiovisual meeting requirements. In turn, they may choose to rent equipment and/or labor from the in-house provider to augment their needs while on-site. When replying to this RFP, please exclude any fees or charges or requirements to the CLIENT NAME or our AV partner. Recently, some facilities and their “in-house” AV companies have instituted a variety of clauses and fees that appear punitive without providing a service or benefit to the organization or their AV Partner. The information below is designed to remove any of those clauses at the bid or RFP phase of site selection. They will also be included as an addendum in final signed contracts. CLIENT NAME has depended on the services of our professional AV partner and we plan to use their services at our future meetings. Therefore, CLIENT NAME will not accept any clauses within a proposal or contract that include unusual fees, charges, or unnecessary additions as a result of using our AV partner. Examples of these include but are not limited to:
• Requirements for supervisory labor to load in or out of the facility
• Fees to prepare rooms for use
• Charges for podiums, power, heating, air conditioning or lights within the meeting room
• Require the use of floor or wall coverings if this is not also practiced by the in-house AV company
• New labor/union contracts (if there were none at the submission of the proposal or when signing the contract)
• Fees or charges for similar services which in the past decade have not been standard practices in the industry
2. Review Suspicious Contract Line Items
Arm yourself with insider knowledge for the next hotel/venue contract negotiations. Know that you can always request to remove certain line items or include your own negating clauses so you’re not stuck with extra charges and fees. Here’s some examples of typical line items you can request the venue
to cross out or modify:
Charges, penalty, or fees for using your own preferred vendor instead of the hotel’s in-house vendor
Disputes with the hotel’s in-house vendors for erroneous charges or other incidents can’t be disputed through hotel management
Pay to supplement your preferred vendor’s staff with the hotel’s in-house vendor’s staff
Pay a liaison or supervisor fee to monitor your preferred vendor’s equipment load in and load out
Pay a fee to plug into existing electrical outlets
Prohibited from creating your own WiFi hotspots or using your preferred vendor for internet connectivity
Deposit required by your preferred vendor in addition to your insurance requirements
Inflated insurance coverage requirements
Loading dock or freight elevator charges or fees
Preferred vendor deposit required on top of insurance requirements
Unattainable time requirements for submitting plan, diagrams, and production schedules
Production guidelines designed to slow down and create additional costs to your preferred vendor but are not enforced with the hotel’s in-house vendor.
3. Add a Contract Addendum
You can negate terms you don’t agree to by adding an addendum at the end of a hotel contract. This addendum can be in addition to, or in place of, modifying contract line items one by one. Below is an example addendum that gives the meeting planner the ability to use their preferred AV provider without incurring any fees. Again, this text can be modified to include other partners such as food, florists, DJs, etc.
Audiovisual Services Provider: CLIENT NAME’s attendees have unique audiovisual needs and therefore we have an AV provider that has been a reliable partner for several years. CLIENT NAME reserves the option to use our own AV provider for all of our audiovisual needs with no additional charges, fees, or penalty of any type to CLIENT NAME or our AV partner. This addendum is understood by the hotel/meeting facility and supersedes any other items in this contract to the contrary. It is incumbent upon the facility to remove these types of clauses from any proposals prior to submission to CLIENT NAME. CLIENT NAME expects the facility to openly bring up and address these items for a detailed discussion and acceptance prior to including any of them within our final agreement.Thanks to our friends at Rental and Staging Network for the RFP clause and contract addendum!
Check out these great industry articles for more negotiation tips.