RECR 470 Chapter 9: CH 9 Negotiations & Contracts

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Chico State University
Recreation and Parks Management
RECR 470
Matthew Stone

4/19/17 CH 9: Negotiations & Contracts - Negotiations o Negotiations: involve 2+ parties coming togeth. to reach agreement for their mutual benefit st ▪ 1 step preparation by gathering info • Reach 3 key areas—your product, your comp., & the prospect ▪ Product knowledge begins by studying prop fact book • Also understand when your prop. needs group bus., optimum guest mix, & av. daily rate for ea. mkt segment o 3 categories for bargaining levels: ▪ 1. Peak: period when demand for prop./its services is highest/highest prices can be charged • “high season” ▪ 2. Valley: period charac. times when demand is lowest • “value season”/”low season” • Reduced prices offered to mtng planners to attract bus. ▪ 3. Shoulder: period falls between peak/valley • Rooms avail. & mid high rate can be charged • Time when many prop. concentrate their sales/mktng efforts o Factors to consid. when eval. your prospect’s position: ▪ Budget ▪ Purp. of mtng ▪ Dates ▪ Arrival/departure pattern ▪ Hot buttons ▪ Past probs. ▪ Group history ▪ Decision deadline o Cust. lifetime value: value of profits expected from cust. future purchases ▪ Corp./ass. mtng planner who’s satis. & books sev. mtngs w/your prop. over buying lifetime = more valuable than 1 time purchaser ▪ If satis. cust. refers oth. mtng planners value = greater - Letter of Agreement/Contract o Letter of agreement/contract: letter from buyer accepting proposal ▪ No legal agreement/contract exists unless both parties have accepted hotel’s proposal ▪ Protects client/hotel ▪ Clearly stated checklist of what’s expected of either party o Separate paragraph/clause for ea. pt. ▪ Ea. topic should have its own header & ea. pt. should be doc. o Inquiry questionnaire: questionnaire requesting a post-convention critique from hotels used in past by specific mtng groups o Proposal letter: letter sent by hotel before letter of agreement/contract that spells out exactly what cust. will receive ▪ Selling doc. that inc. key feat./benefits ▪ Should ask prospect to take action o Request for proposal (RFP): action initiated by mtng planner for offer/bid on hotel services o Reminders: ▪ Date contracts ▪ Mtng planner signs 1 , then hotel salesperson • Send 3 copies asking buyer to sign 2/keep 1 - Names of Org. & Hotel o Preamble: intro statement @ beginning of contract ▪ Id parties involved, statement of intent to enter into contract, name of mtng/event, & perf. dates • Aka “recital”/”background” - Official Dates o Official dates: dates for move-in/move-out & dates for event functions ▪ Inc.  date, day, beginning/ending times for ea. event - Number & Kinds of Rooms o Specify # of guestrooms to be held ▪ Inc.  # of suites, single, double, twin rooms; location of rooms o Room blocks in table format o Cutoff date: desig. date when buyer must release/add to function room/guestroom commitment o Specify method by which room resos will be made - Rates/Commissions o Specify rates for ea. type of accommodation ▪ List rates lowhigh o Nego. formula for est. future rates ▪ Consumer price index: index that compares changes of costs of basic goods/ services w/prices prev. set in fixed-base period o Applicable taxes should always be spelled out o Third-party mtng planners may sometimes be involved in nego. ▪ Contract should specify terms/conditions under which any commissions will be calc./paid - Arrival/Departure Pattern o Arrival/departure pattern: anticipated date/times of arrival/departure of mtng group’s members ▪ Flow chart: indicates arrival/departure pattern of mtng partic. ▪ Early departure fee: set fee charged to hotel/conference center guest who checks out earlier than orig. departure date orig. agreed upon • Clauses may be nego. in case of emergency/change w/out penalty - Mtng Space o How much mtng space to hold is a pt. to be nego. ▪ Date must be set by which program will be completed to pt. that unused pub. space can be released • Release date: date beyond which hotel is free to rent unused function space to oth. groups o Avoid naming specific function rooms/inc. clause to indicate how & when mtng space may be released o Consid. guestroom-to-public-space ratio ▪ Group ceiling: max. # of guestrooms that can be allocated to groups on partic. day • Aka “group room allotment” - Complimentary & Reduced-Rate Rooms o Complimentary rooms offered based on # of guestrooms used ▪ 50:1 ▪ Policy should be spelled out in clause ▪ Rooms calc. cumulatively o Contract should specify # of rooms that will be reduced, rate for ea., & designated occupants ▪ Specify guestroom req. /detail how mtng room rates will be assessed based on room pick-up - Prior Visits o No charge for mtng org./staff to do prior visit ▪ Based on space-avail. basis - Working Space o Offices, press rooms, & sim. working space should be discussed ▪ Indicate location of rooms to make sure convenient to mtng sessions - Reg. Control o Hotels clear all requests for accom. from ppl of partic. industry w/convention org. ▪ All rooms should be applied against guar. # of rooms - Exhibit Space o State charge/what’s inc. in charge ▪ Consid.  hrs. open, electricity, air/heat, carpeting, # of tables/chairs o Secure dates for exhibition from mtng planners - Food Functions o Make budget projections ▪ Nego. fixed price percentage off printed menu prices in effect @ time of mtng/ attach current banquet menu to contract o Specify how much notice you req. for guar. on food functions ▪ 48 hrs. = common o “Price, plus, plus” ▪ Plus, plus: add. of taxes/service charges to standards prices charged for F&B • Desig. on catering contract & BEO by notation (++) - Refreshment Breaks o Explain all that is involved when hotel supplies refreshment breaks ▪ Inc. prices for cakes, juices, & soft drinks ▪ Clients should have faith that hotel charges = fair - Liquor o Spell out hotel’s policy on liquor service ▪ Policy on bringing in alc. from outside o Charge by bottle arrange for inventory control/credit given for unopened bottles - Gratuities & Servic
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