This month we hear from 'Guest Blogger' Nick Milne, Robinsons College CambridgeThey say that what goes round, comes round. On that basis, it’s hardly surprising that terms and conditions and principally cancellation charges that are their cornerstone, seem to be up for discussion again. In spite of all the good things that have happened in our maturing business, the latest target for some who want to gain marketing advantage, is “negotiated” preferential cancellation terms. I use the word negotiated advisedly because actually there’s an element of strong-arm tactics going on which leaves venues with a take it or leave it choice.
Don’t get me wrong, I’m all in favour of negotiation to get a mutually satisfactory deal for the client and the venue. However, we really do need to move beyond the notion that venues can run sustainable, profitable businesses on the basis of a wing and a prayer. The idea that there are no significant costs to be covered or that a cancelled booking can be replaced easily, are the stuff of fantasy land. So here are some ideas around negotiation that is reasonable.
First, lets have cancellation terms that come into effect as soon as the contract is signed – as the MIA model t&c lays-out. I do recognise the rationale behind sliding scales but really their effect is that the venue has to make a commitment immediately, whilst the client has a long “cooling-off” period. Not exactly equitable.
Second, of course it is understood that clients cannot be sure of their numbers too far out from the event. There are lots of factors which determine this and it is understandable that the client is reluctant to make a full commitment too early. So what about agreeing a number that the client is comfortable with which is maybe a reasonable proportion of the final anticipated numbers, say 75%. Maybe this is based upon last year’s numbers or the minimum the venue can accept in the meeting room or any other yardstick that the parties can agree upon. Then hold the rest of the volume on a provisional basis with mutually agreed chase dates. Both parties have made a commitment they are comfortable with and neither is unfairly treated.
Third, to give everyone a clear idea of the commitment they are making, how about venues calculating maximum cancellation charges applicable and stating the figure up-front in the contract. That would concentrate everyone’s mind.
There’s no doubt that it is good business sense to negotiate on any aspect of the deal and cancellation charges shouldn’t be excluded from that. But negotiation should be about win:win and right now the trend of squeezing venues on this matter is definitely about heads I win, tails you loose.
I wonder what anyone else thinks?
Nick Milne
Robinson College Cambridge
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