Negotiating Reality Check

Every now and then something happens during the week that makes me wonder "what are they thinking?"

Not once, but twice this week, clients who have negotiated rates for their groups, signed contracts, made their reservations, and are less than a month away from walking through the doors of one of our hotels called me to see if they can "get a 'better' rate."

Why? (All together now:) "Because another hotel has offered a lower rate."

With all due respect to both client and competitor, that other hotel was probably offering that same low rate when you were discussing rates with me. In addition, I don't know what hotel you're referring to, so I can't tell you that they even play in the same arena as the hotel with which you now have a signed agreement, multiple reservations, and a staff of happy hotel people waiting for your arrival. Perhaps the reason they can offer a lower rate is that they are a much larger hotel with way more rooms to fill, or they might just have more unsold rooms because no one wants to stay there (which could mean they're substandard, or simply in a less desirable location, or something else entirely).

Remember, we work within the same "supply and demand" world as most businesses. The more there are, the less they cost. The fewer there are, the more you pay for them.

For me, it's like buying a house. The seller and I arrive at an agreeable price, I sign my life away, obtain the financing, and do NOT come back to the seller at closing and ask him to drop the price. It's like ordering a value meal through the drive through, receiving the price of your food through that annoying little speaker, then asking to renegotiate the cost of your meal when you drive up to the window. The deal was done when the voice said "please drive up to the second window."

It is not a hotel sales manager's job to rip you off. In fact, it's the hotel sales department's job to create demand, which means they're tasked with filling rooms that would otherwise sit vacant. The hotel generally knows how many rooms per night this would be by monitoring the hotel's past performance during the same time period. It's not a science, but there is plenty of evidence to indicate that a hotel's booking patterns will repeat themselves year after year. Because of this, they are given some flexibility in order to accomplish their mission, which is why groups can usually negotiate a better rate than that which an individual might secure online. I say "usually," because there are times an internet rate may drop below a negotiated group rate, but you need to keep in mind that that advanced purchase rate on the internet probably comes with some stipulations, which might mean you cannot cancel your reservation and receive a refund if you change your mind, or find an even lower rate down the street. Typically, when group rates are negotiated, cancellations within a specific number of hours or days prior to your group's arrival is permitted, and should be clearly outlined in the contract you signed.

It is not the hotel sales department's job to give rooms away, but to sell them, which is why they are called the sales department. It should not be assumed that just because you are the one negotiating the rate that there will be a free room in the deal for you. Many hotels do have complimentary room policies which might allow for one free room for every twenty five or fifty paid rooms (either per night or cumulative, depending on the hotel's policy), which is something you can discuss with your sales manager.

Believe me when I say that your hotel sales manager is working for you, and if your group is coming at a time that will help "create demand" (especially if they have a "low season"), they are working hard to negotiate a deal that is both attractive to you, and beneficial to the hotel.

Please drive up to the second window.