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
To respond to Nick simply click on 'comments' below.
1 comment:
Having worked in all areas of the industry as an event organiser, booking agent and hotel/venue, I understand why there are these concerns from each area of the industry. But I whole heartly agree that this type of "benefit tactic" by 3rd parties is certainly not in the interest of the client or the venues. What about the client's proctection from venues cancelling or reducing numbers due to overbookings? How would better negotiated cancellation terms work for the clients when the problem is the other way around? These terms are for proctecting both parties fairly.
Most hotels/venues do negotiate their cancellation terms to some degree, with their regular clients as they have a mutually beneficial and solid business relationship. It only comes into question when a 3rd party are using it as a "marketing edge" to win business as it is becoming more competitive for them. As technology makes it easier for clients to book direct, the "middle man" could be left out of the equation.
My personal experience of this situation has revealed that it can be a lack of understanding within this are of the industry that leads to issues such as these. I would challenge those 3rd parties to spend time in a hotel/venue and understand the necessity of these terms and why they are VITAL to managing revenue and potential loss of income. With higher spend bookings lead times on the increase, this business is no longer easier to just replace.
The majority of hotels/venues will work with their clients to offer the best service and assistance when such matters arise. Venues are far more flexible than they have been in the past and this has in some ways cost them, but at the same time encouraged a better working relationship with clients.
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