SITE AND SELECTION

Guidelines for Negotiating a Letter of Agreement
between a Hotel and Group Client

Whenever possible, we will use the GSA Standard Contract. All contracts must be reviewed by a GSA Headquarter Staff Member and signed by the GSA Executive Director.

The key to having a successful meeting is to begin at the beginning, select the proper location, and negotiate a fair agreement that meets the needs of both the group and the facility.

Before beginning negotiations, you should be aware of qualities that make the meeting attractive or unattractive business for the hotel, for they will affect every aspect of the agreement. Here are some of the points to be considered:

• Time of Year. April, May, and October are the most popular convention months in most cities, so groups meeting then may pay higher rates than those meeting in January or July. (This rule may vary slightly in resort properties.)
  
• Weekend vs. Weekday Meetings. Many convention hotels are busy all week, but virtually empty on weekends. The group that shows a willingness to arrive Friday and depart Sunday should have the edge in negotiations. Conversely, a group arriving Monday or Tuesday and departing Thursday is not very welcome at a hotel that prefers to accommodate two groups over that same period.
  
• Holidays. Most groups do not wish to meet immediately before, during or after holidays, so rates are often lower for groups willing to meet during that time.
  
• Food and Beverage Functions. Obviously, the group with numerous scheduled meal functions in the hotel is more attractive than the convention whose attendees leave the facility and eat most meals elsewhere. You should also be aware of the degree to which this group utilizes hotel services, such as bars, restaurants, and room service.
  
• Ratio of Meeting Rooms to Sleeping Rooms Utilized. An organization utilizing fifty sleeping rooms and eight meeting rooms places severe restrictions on the facility's ability to book other groups, and should anticipate having to pay rental on some of the meeting space. Only hotels with an extremely high transient demand are likely to be lenient in such cases.
  
• Location. Rates are often lower in smaller, less popular cities, than in well-established convention destinations like San Francisco, New York, or New Orleans. Some secondary cities are attractive meeting sites, but more than hotel space and rates should be considered. The city should have frequent non-stop flights from all parts of the region, restaurants and room service open early and late, taxi service so that attendees who dine outside of the hotel will not have to walk back, and good support services, such as A/V companies, convention decorators, tour agents, etc.

After review of all of these points and determination of the value of the meeting, the planner is ready to begin negotiations with the facility representative, who has probably completed the same evaluation process.

Hotels are for-profit businesses so it should be clear that all concessions have a price, and that there is no free lunch where the goal is a reasonable profit margin.

Here is a list of elements to be included in negotiating a letter of agreement between a hotel and a group client. These elements should be tailored to meet the needs of both parties involved.

Any written agreement should include the following basic information:

Many important issues should be included in the discussion of reservations. Here is a list:

A.	Room Night Pattern
	A "block form" pattern is suggested for quickly and easily determining room night reservations. The chart below is but one of many forms of "block" patterns. Remember to include rooms used for pre- and post-meeting activities such as field trips and short courses.
DATES           DAYS           ROOMS: Single           Double           Triple           Quad           Suite         TOTAL
B.	Reservations
	The following points should be reviewed by the parties involved:
	1.	Facility Representative
		a.	State the policy on guaranteed reservations and deposits.
		b.	Quote the maximum number of rooms the facility will reserve for the association, based on facility size and history of group.
		c.	Specify the procedure for making reservations; i.e., individual calling, room lists, Convention Bureau housing, etc.
		d.	Clearly present any non-performance provisions.
	2.	Meeting Planner (You)
		a.	Present the facility with reasonable room pick-up estimates, based on previous meetings.
		b.	Confirm procedure for making reservations.
		c.	Identify any special requirements, such as suites for key officers, staff, etc., with early arrival or delayed departure dates.
		d.	Work closely with and notify the facility of any changes.
		e.	Negotiate any and all forfeiture provisions.
C.	Complimentary Rooms
	Complimentary accommodation allowances vary from hotel to hotel and from city to city, so this is a negotiable item. An industry standard is one complimentary room per 50 revenue-producing rooms occupied during a convention. The following issues should be spelled out in the agreement.
	1.	The number of complimentary rooms allowed.
	2.	Pre- and post-convention availability of comp rooms. (This is especially critical for meetings with trade shows, where staff must arrive early for move-in, or for meetings where key officers arrive early for committee meetings.)
	3.	Number of complimentary credits assigned to suites. This varies enormously from hotel to hotel. For example, a suite that in one facility could utilize only 4 comp credits, may take up 12 in another.
	4.	Is credit granted on the master account for comp units accrued but not utilized?
	5.	The number of comp rooms needed and which individuals will occupy those rooms.
	6.	Negotiate a special staff rate for staff rooms utilized beyond the comp rate and number of Staff rooms used. (usually 50% of the group rate.)
D.	Control of Rooms
	Specify whether the facility or the association controls the room block, hospitality suites, and meeting rooms. Here are some groups to be considered:
	1.	Officers and other VIPs—The group may wish to reserve a special block of rooms and suites for this group and have VIP reservations returned to them for processing before forwarding to the hotel. The hotel must be alerted to special requirements at the outset, such as the Presidential Suite for the section Chairman, etc. The hotel representative should specify if there are restrictions on the use of such suites for entertaining, etc.
E.	Cut-Off Date
	Most agreements contain a clause stating that the facility reserves the right to release all rooms not reserved by a certain date (often 21–30 days before the meeting), and make them available on a first-come, first-served basis. A good agreement should include the following:
	1.	A cut-off date that is reasonable for both the group and the facility.
	2.	You and the facility representative should communicate periodically prior to the cut-off date, and review the status of reservations before rooms are released.
	3.	Request that rooms (if available) reserved after cut-off be available at the convention rate and be credited to the group's room block.
F.	Rates
	Rates Room rates and possible guarantees should be included, if this subject was negotiated. The rates should be clearly stated with any increases or decreases to which there has been mutual agreement. Rates should be specified by room type with the number of rooms available in each category (i.e., single occupancy—300 total rooms blocked; double occupancy—50 total rooms blocked; triple occupancy—50 rooms blocked; quad occupancy—50 rooms blocked; one bedroom suite—2; two bedroom suite—2 presidential suite—1). Specify if rates are net or gross:
	1.	Net Rate—Cost direct to the organization or actual revenue realized by the hotel. This rate is not subject to a commission factor.
	2.	Gross—Cost direct to the organization or actual revenue realized by the hotel. This rate is subject to a commission factor. Remember that all rates quote do not include tax, resort fees or gratuities.
G.	Check-In Time
	Specify approximate time and whatever special arrangements may be required or available for early arrivals.
H.	Check-Out Time
	Specify time. Determine late check-out privileges and whatever special arrangements may need to be made, such as luggage storage on last day of meeting, along with any possible fees associated with these services.

Determine the billing procedure—i.e., master account, individual accounts, direct billing, and payment due upon receipt of invoice. Provide the facility with all billing information at least 4 to 6 weeks prior to the function, including the following:

You should make arrangements with the facility to review charges to the master account at the end of the day, or at least before checking out of the hotel, while memories are fresh about the various functions and possible charges. This makes final approval and payment of the bill much easier.

If your section plans to have exhibits as a part of the meeting, the following points should be discussed with the facility representative:

ADA compliance is necessary for sleeping rooms, meeting space and exhibit halls.

All of the clauses can be found in the sample contract. For the protection of both parties, it is suggested that the following clauses be included in the written agreement:

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