As if natural disasters and a pandemic weren’t enough to factor into event negotiations, unpredictable economic conditions, funding and travel preferences are casting gray skies over meetings and events these days.
“Another curveball gets thrown at the industry,” quips Barbara Dunn, attorney and owner of Barbara Dunn Law, who has decades of experience negotiating contracts for clients in events. Unlike other challenging times, the current environment is definitively not a buyer’s or seller’s market, Dunn says.
At the same time, hotels and other venues can’t necessarily rely on leisure travel to cover for lost business anymore. As a result, meeting and event planners are scrambling for their show to go on—namely, with the help of a request for proposal (RFP), which has the ability to either hold firm or accelerate the momentum of planning depending on its content. With the right legalese, an RFP can leave room for event profs to quickly source and secure venues that can keep up with an ever-evolving economic landscape.
The travel industry at-large is bracing for a significant drop in visitors from Canada who are angered over President Donald Trump’s allusions to annexation. For reference, a 10% reduction in Canadian travel would result in $2.1 billion in lost spending and 14,000 job losses, according to the US Travel Association. Fears of an impending recession are also causing some Americans to scale back their travel plans. To be exact: American travelers are expected to take an average of 3.8 trips in the next 12 months, down from 4.0 reported last month, TIW Travel News reported.
An inherent challenge with uncertainty is forecasting a return to normalcy, which is not altogether unfamiliar territory for experienced event professionals.
“Finding flexibility in contracts really continues no matter what we’re talking about,” says Dunn.
With that, here are five tips for protecting your meetings using an RFP:
1. Start on the right foot.
“Some people say, ‘Don’t put all your cards on the table,’” notes a dissenting Dunn. “No, put your cards on the table.”
Dunn’s point: Both planners and venues are in a pinch, so the faster event organizers share what the true deal breakers are, the sooner a contract can be signed and trust can be earned.
2. Focus on force majeure.
Ultimately, negotiations and emergencies end up coming back to force majeure, a common clause that frees both parties from liability or obligation in an extraordinary circumstance.
The cancellation clause doesn’t just have to be tied to an act of divine intervention but can also relate to circumstances outside of an organization’s hands causing significant changes to an event. For instance, if government actions prohibit a percentage of attendees from traveling, planners will need protection from attrition penalties because not enough rooms are booked.
Dunn says the key is to get as much as possible in writing. If your event’s success is contingent on a large international delegation unable or afraid to come, note in the contract and have data points to back up the claim.
3. Use precise language
Along those same lines, event organizers can maximize protection by leaving as little wiggle room as possible. This is especially important regarding so-called “junk fees” that venues charge without necessarily explaining what the extra costs provide.
Dunn says there is little planners can do about future taxes. However, they can specify that their organization agrees to rates and fees as of the date the contract is signed. That way, they are protected from potential increases and new surcharges.
4. Make it personal
There may not be much that’s romantic about legalese, but planners can help themselves by putting on the charm where they can. “I always jokingly say that RFPs are like writing a personal ad,” Dunn says. “You’re trying to make your business seem as attractive as possible.”
Highlighting an event’s strengths can help sweeten a deal during the give-and-take process. Attractive attributes can range from high-spending attendees to potential for recurring business. The more a venue covets your meeting, the more likely it will be to lower rates and agree to your necessities.
5. Be willing to negotiate
Coming at a contract from a position of strength is ideal, but if the economy goes south, new realities may set in. Dunn predicts that unlike COVID times, planners and event organizations will likely try to have their meeting continue in some form—with fewer attendees or as a hybrid event.
Venues may be accommodating to change under two scenarios:
- Planners communicate early that outside-the-industry forces are having an impact on projections;
- opr when planners have something ready to offer in exchange for waived attrition or other penalties. Concessions can include reducing or eliminating room rebates, or ceding suites back to the hotel for it to market to high-paying guests.
“Hope for the best; plan for the worst,” Dunn advises.
