One of the two major reasons for developing a Strategic Meetings Management is to help reduce risk to the organization; the other is to reduce costs. By putting controls in place for a contract negotiation and signature process and developing customized contract clauses to be included with your meeting contracts, you are able to mitigate onerous contract terms for your organization.

What are some of the risks for our organizations?

• Cost:
  • High attrition penalties causing additional payments if your room block falls short
  • No rebooking clauses so if the meeting cancels, you cannot apply any of the penalty fees toward a new meeting
  • Paying "rack rate" - resulting in paying more than other groups are paying for similar meetings
  • Intellectual property: Lack of non-compete clauses (to be sure your competition is not meeting at the same time you are)
  • Location: Think "AIG effect", negative publicity for a company based on where a meeting was held. You need to be able to understand and control where certain meetings are located so that you can ensure that your company will not be held up as an example of poor decision making.   

How many of you have received calls from an Administrative Coordinator or Executive Assistant wondering why they have to pay a cancellation even if they told the hotel a week before the meeting they were not going to need the space after all? (I see you nodding your heads!) You know that the answer is that the hotel contract is a binding contract and the company is obligated to pay the cancelation penalty. You also know that the hotel has been holding this space for several months, and now there is no opportunity to resell it in order to fill the rooms, the meetings space, the meal functions so that the staff can work and the hotel can make a reasonable profit.

The worst case I have seen in the past couple of years by a non-professional planner who cancelled a meeting with no re-booking clause which resulted in a $160,000 cancellation penalty check the company had to write to the hotel. Everyone loses in these situations: the hotel would rather have you and your guests at the hotel because of all of the ancillary revenue, the staff doesn't get paid because there is no need for them to work, and company loses out because they received zero return on their $160,000 "investment".

By putting reasonable, yet effective, process in place, you can significantly reduce the risk for your organization. Consider some of the following strategies:

• Put in a process whereby the sourcing and contracting of hotel space is centralized in one area such as meeting services or procurement.
  • The client can still select the hotel they want to use, but they don't need to worry about negotiating the contract terms
  • Work with your legal department to develop specific contract terms that must be included in each contract; this will help to streamline the negotiation process
  • Make the process speedy and simple, ideally:
    • 24 to 48 hours for hotel availability reports
    • Ten days for contract negotiations (can be longer for large complex meetings)

Bondurant Consulting provides the following services:  

• Assessment of SMMP potential for your organization   
• Development and implementation of SMMP for meeting & travel managers
• Training programs for hotel companies and 3^rd party meeting planning agencies which increase their understanding of Strategic Meetings Management, resulting in more successful engagements with clients who are involved with SMM