Short lead times don’t leave much area for negotiations, says Ian Cummings, global head, CWT Meetings & Events. Photo Credit: CWT Meetings & Events
Discounts and event contract renegotiations were a common theme when
live events tentatively returned in a select number of destinations in
2021, with hotels and venues eager to attract business. With many
countries now having eased restrictions, planners may face a variety of
pricing challenges when organising events, with much less room for
negotiation than before.
The critical factor in negotiations is lead time
Short
lead times don’t leave much area for negotiations. “Corporates must be
planning now for the second half of 2023 if they want to find
availability and have the opportunity to negotiate,” says Ian Cummings,
global head, CWT Meetings & Events.
“Some organisations are already focussing on 2024 for their big
events and we must encourage a pushing out of more sensible longer lead
times in order to help with better planning, availability across the
whole supply chain and fair negotiations to meet specific budgets.”
Expect less leverage with hotels
Earlier this
month, Marriott International said it had seen the largest surge in
demand since the pandemic started in the first quarter of 2022, with
every region except for Greater China showing signs of recovery.
With occupancy rates bouncing back and events taking place in-person,
securing a meeting space at a favourable price might be harder than you
think, with hotels likely to offer far less flexibility, due to
increased demand.
Price is not the only factor
If you can’t
negotiate a lower price for a venue or hotel rooms, consider what else
can be thrown in to sweeten the deal. This could be an upgrade of hotel
rooms, free transfers between a venue and an airport, extra amenities in
hotel rooms or some additional items for food and beverage.
Agencies have become stronger negotiators
CWT’s
Cummings says most agencies have shifted their risk profile as a result
of the pandemic and are no longer prepared to “be the bank” offering
long credit terms and pay deposits without having funds in-house.
“They have become much stronger negotiators and this was to be
expected. I don’t think venues are charging excessive rates, but
certainly due to the increased demand the need to discount is more
absent and instead rates for meetings & events are being pushed up.
We know these rates will be at the higher end and we will always try to
do the best we can for our clients, making budgets stretch as far as
possible.”