How to Structure a Contract for a Hotel Group Buyout

Last month I participated in a LinkedIn group discussion with a meeting planner who was seeking advice on how to structure a contract for a hotel group buyout. Like any hospitality contract question, there isn't a "default" answer for group buyouts. The most important element for both meeting planners and hoteliers is to approach the event as a partnership, with a mutually beneficial contract and good pre-event communication.

Based on the strong feedback I have received from my answer, I've taken the liberty of sharing the question and my response in context on how to structure a hotel contract for a group venue buyout.

Group Meeting Planner:
Hi! I am in the process of negotiating a contract for a "virtual" venue buy out for a staff retreat. I say "virtual" because we'll take 100% of sleeping rooms and all meeting space for our program but the outlets (restaurant, marina, etc) will remain open and available to outside guests.

Any tips/advice/clauses that I should include? I obviously want to protect the sleeping rooms, meeting space and full use of the resort for our use. However I also don't want to get stuck with unused rooms/space if for some unforeseen reason our group size is reduced.

Thanks!

My Response:
In my experience, a buyout is very much a partnership arrangement with your venue and no two events are exactly alike.

In your specific example, you are looking to ensure full exclusivity – rooms, space, facilities – and mitigate all of your risk at the same time. I see these as competing priorities and it may be necessary for you to evaluate the importance of each.

It may also be beneficial to understand that the venue is taking on risk as well. In allocating the totality of their facility to you, they "risk" the opportunity to sell to other groups/guests at a higher rate. They also "risk" lost revenues if your group size is reduced.

If exclusivity is most important to your group, it is absolutely reasonable to expect that the venue will ask you to fully guarantee all of your rooms and your banquet minimum, both with no attrition allowance. This should ensure full use of the facilities without interruption from other guests and ensure the expected revenues to the venue. (WIN-WIN)

If it is more important to mitigate risk from reduced group size, then I suggest working with the venue to establish a reasonable attrition allowance that permits the hotel to resell your unused rooms/space. The venue will mitigate its risk through resell and there would likely be other guests in the facility, but you will not be "stuck" if your attendance falls. (WIN-WIN)

A third alternative may be a bit of a blend. If the event takes place further out, perhaps the two parties would mutually review the anticipated usage and make adjustments to the room block/space hold based on reasonable assumptions. If the group is reasonably expected to be smaller, you could return some of the rooms/space without liability and allow the hotel to resell them. However, if your numbers are on target, you could ensure your full exclusivity. (WIN-WIN)

Again, the most important component of a buyout is partnership. Be confident that you have selected a true partner and you will ensure your mutual success.

3 Great Sales & Customer Service Reads for the Week

Here are three short, compelling reads regarding customer service and sales. I found each of these very poignant for guest service and hotel sales in our industry:

For more customer service and hospitality sales insights, please follow me on Twitter: @mrkevindonahue.

How To Position Yourself as an Expert – ROLL UP YOUR SHIRT SLEEVES!

I happened upon a curious article entitled "How to Roll Up Your Shirt Sleeves" via a luxury company's social media and it really struck me. As a man who wears shirts, I suppose I am well-within the blog's target demographic for this post; however, what really interested wasn't the content, but rather the positioning. 

The article details (with photos AND videos!) different ways for men to roll up their shirt sleeves. This is, I suppose, interesting information for a number of readers. 

Beyond the content, I think this is a great example of how to position yourself as an expert.

Each of us has a number of interests in which we have a great depth and breadth of knowledge. Be it personal or professional, I'm sure there are several areas in which you could be considered an expert. And therein lies the opportunity. 

By taking the next logical step and SHARING your expertise, you can not only impact your audience but also establish yourself as an expert – a status that can reward you handsomly in career pursuits. After all, who would you rather hire/work with/buy from? An expert or the other guy? 

In what areas are you an expert? Find your niche and roll up your sleeves!

The best iPhone / Droid app you're not using

Question: What's the best iPhone / Android app that you're *NOT* using? 

For 95+% of the iOS and Droid users, the answer is BUMP

This great app allows you to quickly share your contact information or photos with other new contacts by simply bumping your phones together. Seriously, it's that easy. You don't have to call one another and save the number in your phone, download VCards or any other legacy sharing strategy. Just bump and done!

Recently the development team upped the ante a new update that allows you to bump photos from your phone directly to your computer. How cool is that?

And the best part? Yeah… it's free. Download Bump for iPhone and Android

Still have questions? Watch this video demo. 

 

Why you NEED a Travel Agent

You already know how to use Expedia, Travelocity, and TripAdvisor. You're not an online travel novice. Perhaps you're using more advanced tools like Kayak, Hipmunk, and TripIt to plan your vacations. But are you neglecting to use the #1 travel resource in the world? If you're not using a professional travel agent, then you're putting your time, money, and experience at risk. Travel agents are travel EXPERTS. They've been there, done that, and donated the t-shirt. 

But don't just take my word for it. Here's a Forbes.com post on why you need a travel agent:

There are many, many good reasons, which I will explain. But the bottom line is that they know more than you do, they are better connected than you, they have access to benefits you can’t get otherwise, they can often beat any other prices available (even online, yes), and after you have planned everything, they provide a safety net during your trip that you simply won’t get by booking yourself or buying insurance. Having a top travel agent can also make you an instant VIP – free room upgrades, hard to get restaurant reservations, cutting lines, access to otherwise closed stores and exhibits, private guides, and cheaper – often much cheaper – premium airfares. Here’s the best part: even though most top agents charge fees, in almost every firsthand experience I or my friends, family, and acquaintances have had, travel agents have saved money, often a lot of money, thousands of dollars, and in every case, more than paid for themselves.

Why you need a travel agent – Forbes.com 

The Sales Rep vs The Sales Expert

Ryan Estis posts a great blog on the value of sales positioning and how the role of the sales professional has changed in the last ten years, including this slide on the difference between the sales rep and the sales expert.

 

 

 

I'll give you two shots on who wins more business, but I bet you'll get it on the first guess.

More from Ryan Estis here.

 

5+1 Changes to Make to Your Resume NOW!

I read an interesting article on Glassdoor entitled, "5 Changes to Make to Your Resume NOW" in which some often overlooked points were resurfaced. It's worth a read. 

One point that was not mentioned and should be emphasized is how important it is to communicate your social media handles along with your contact information. Your social media standing is a direct reflection of your professional interests and network. and can demonstrate industry engagement

This important engagement element should not be overlooked. After all, there are (literally) hundreds of studies showing that prospective employers are going to seek you out through social media. If this is a point of distinction for you, then you should showcase it, right? 

If you're actively promoting yourself professionally through a blog, Facebook page, or Twitter, you should definitely include a handle or link in the header of your resume. Don't miss a chance to make this positive impression!

Six Steps to a More Effective Sales Proposal – 2. Don't Feature Dump

In the first installment of my series "Six Steps to a More Effective Sales Proposal", I outlined the importance of focusing your proposal directly on your customer's goals and concerns, rather than on your company's accomplishments and background. 

The second step to writing a sales proposal that will increase your capture rate is to avoid "feature dump". In this installment, we'll detail exactly what that means and how to best present your strengths. 

 

Six Steps to a More Effective Sales Proposal

 

STEP TWO: DON'T FEATURE DUMP

It slices. It dices. It mowes your lawn. It washes your car. It even changes diapers!

In my experience, "feature dumping" is the achille's heel of so many salespeople. From day-one on the job, salespeople are taught the in's and out's of their products with such a fervor, it becomes easy to believe that specs are what customers want to hear.

The harsh reality is that SPECS DON'T SELL. While it may be fascinating that your {INSERT PRODUCT HERE} does {INSERT SPEC HERE}, the truth is no one buys because your {PRODUCT} does {THAT}. 

Take that long list of bullet points and trash it.

Instead, focus on BENEFITS. How does you're product fill the need that your customer has? How does buying your product enrich their business or enhance their experience?

If you watch an infomercial, you'll immediately understand the difference between features and benefits and how to emphasize the latter.

Perhaps you are familiar with the the Showtime Rotisserie Oven from Ronco. Pitched as a simple oven for experienced or novice cooks, Ron Popeil takes only a moment to explain that the oven has many programmaned time and temperature settings for different foods, but focuses his presentation on the benefits – you can cook many foods easily, you save time in cleaning and you can "set it and forget it!" – just walk away knowing that the oven will cook your food properly. You get a delicious meal and you also get free time. Set it and forget it!

By emphasizing the explicit benefit of your products for your customer, you demonstrate that you understand your clients needs. In focusing on how your solution benefits the client, you differentiate yourself from 99.9% of your competition who only knows how to feature dump.

By presenting your offering as a solution to their pressing business need, you create worth in your product. And worth, my friends, is a psychological and emotional need for buyers.

Remember it's never the number of "settings", it's "set it and forget it" that truly sells. 

 

 

While this one tip is going to make you stand out from the pack, be sure to check out the rest of the tips in this series on Six Steps to a More Effective Sales Proposal!

 

1. Six Steps to a More Effective Sales Proposal – FOCUS ON YOUR CUSTOMER

2. Six Steps to a More Effective Sales Proposal – DON'T FEATURE DUMP