A balanced market? Therese Jardin opened her eyes a bit wider when I mentioned that in the Q3 Meetings Outlook report, more respondents cited a balanced market landscape than at any point in the past five years. She’s not seeing a market that could reasonably be called "balanced"—and to be fair, neither are respondents, really: 43% cited a seller’s market and 31% cited a buyer’s market, but with the 26% to cite a balanced market, the aggregate is simply the most balanced we’ve seen.
While some markets and some property types may present as a balanced market or even a buyer’s market, Jardin’s network continues to share challenges of a seller-centric landscape.
"I have a monthly community call that people join and we talk about what’s happening in the market and I’m still hearing from them that hotels are being pretty particular about not offering attrition," says Jardin, CEO of Strategic Event Procurement and instructor of MPI’s Contract & Negotiation Specialist Certificate course.
"[They’re] not accepting lost profit instead of lost revenue, especially for food and beverage—which is crazy because if you have a $75,000 F&B minimum and you’re not going to meet it, but you have to pay the money anyway, then just buy more food or improve your food and beverage experience. Otherwise you’re paying for nothing, right? And I’ve been hearing that people in my network aren’t able to negotiate on lost profit versus lost revenue, which I would call more of a seller’s market."
Jardin says planners are having to contend with extra fees—above and beyond standard service charges—just to hold an event.
"That’s why I kind of popped my eyes a little bit—but it may also depend on the market," she explains. "I think as leisure softens and that revenue stream starts to dwindle, hotels are going to start being a little more amenable to negotiations for group business."
During one of her community calls, a participant explained how a heavy leisure market can overburden certain aspects of hotels and resorts.
"If you think about a hotel’s revenue stream, they’ve got leisure, they’ve got business travel and then they’ve got groups and the food and beverage day meetings that just happen as a fold in. If a hotel, particularly in a resort area, is overbalanced toward leisure, then there aren’t any group meals being served," she says.
"Everybody’s going to the restaurants for breakfast, everybody’s going to the pool, everybody’s hitting the golf course. And so those outlets or extra services at the hotels are getting kind of squeezed because there’s not the group business using up some of those hotel rooms [and] ballroom space. I hadn’t thought of it, but as soon as they brought it up, it made total sense. Take that into account as you’re looking at what the overall market’s going to be like."
As the fiscal hangover of revenge travel (i.e. credit card debt) becomes more of a reality for consumers increasingly impacted by inflation (and potentially a fledgling recession), the slump in the leisure market could help balance the scales in event negotiations.
As planners and suppliers enter negotiations in the current business landscape, Jardin has a few recommendations to ensure win-win situations today and in the future, regardless of how the market tips.
"I bring this up when I teach the MPI Contract & Negotiation Specialist Certificate course: We’re born negotiators. We were all kids once," she says. "Remember, ‘Just one more cookie,’ ‘Just one more bedtime story,’ ‘I promise I’ll get straight As if you let me have a puppy,’ right? We came out of the womb negotiating. That’s an inherent skill in humanity."
Her next point is something everyone knows but may, from time to time, require a reminder: Meeting and event negotiations are usually not high-stakes situations.
"So, everybody, calm down just a little bit—don’t feel like if you make a mistake, it’s going to be the end of the world because it won’t be," she says.
And lastly, ask the party with whom you’re negotiating about the elements that are most important to them, while remaining cognizant of those which are most important to you.
People often hold their cards close to their chest, worried that being more open could lead to failure, yet, Jardin explains, understanding what the other party needs the most will probably get you over the finish line sooner.
It’s important to re-evaluate how important each component actually is for your group. She says planners can be too tied to what they believe to be an ideal clause—whether for attrition, cancellation or something else.
"If your group just generally doesn’t have risk for attrition, don’t sit there and arm wrestle for cumulative attrition versus per-night attrition," she says. "The whole point of negotiating is to reduce your risk, so if your risk in a particular space is already low, don’t waste your negotiating power or leverage on that."
Even if it feels like something you should be firm with you might be better off just letting it go, she says. Give the hotel that "win" in their column and you could get concessions that matter more to your group.
"You want to choose the things that are most important to you to advocate for—don’t focus on something that’s already low risk," she says.
Jardin offers an example of logical and respectful negotiations from her time at Microsoft during which a chainwide agreement with a major hotel company was being ironed out.
"It was a four- or five-hour meeting as we had a 20-page document to go through and we needed to get it so that globally it would be accepted chainwide," she explains. "We put up a big white board with the main points that we needed. Whenever I would acquiesce, I would go up and I would put a check mark in [the hotel’s] column and whenever they would acquiesce, I would go and put a check mark in our column. The goal was really to kind of keep it balanced, but it also made it kind of fun. Again, you want to think of the person you’re negotiating with as your negotiating partner, not your opponent."
