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Chapter 9 Negotiations and Contracts

1. Competencies for Negotiations and Contracts . Describe how hospitality salespeople prepare to negotiate with meeting planners.Identify the elements of a letter of agreement, or contract, for meeting and convention sales.Explain the effect of contract standardization and multiple-meeting contrac

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Chapter 9 Negotiations and Contracts

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    2. 1 Competencies for Negotiations and Contracts Describe how hospitality salespeople prepare to negotiate with meeting planners. Identify the elements of a letter of agreement, or contract, for meeting and convention sales. Explain the effect of contract standardization and multiple-meeting contracts on the meetings and convention industry.

    3. 2 Negotiations—Purpose and Preparation Purpose Two or more parties try to reach an agreement for mutual benefit Create a win-win situation

    4. 3 Negotiations—Purpose and Preparation Preparation—Gather information in these areas: Product—property fact book; peaks, valleys, and shoulders Competition—strengths and weaknesses compared with your property’s Prospect—budget; purpose for meeting; dates; hot buttons; past problems Tools Inquiry questionnaires (obey antitrust laws) Proposal letters

    5. 4 Elements of a Contract or Letter of Agreement Names of organization and hotel Official dates Number and kinds of rooms Rates Arrival pattern Public space Complimentary and reduced-rate rooms Prior visits Working space

    6. 5 Elements of a Contract or Letter of Agreement Registration control Exhibit space Food functions Refreshment breaks Liquor Audiovisual equipment Union regulations Master account and credit procedures

    7. 6 Elements of a Contract or Letter of Agreement (continued) Method of payment Termination/cancellation clauses Damage clause (liquidated or mitigated damages) Gratuities and service charges Attrition clause Arbitration Warranty of authority Insurance/indemnification

    8. 7 Convention Industry Council (CIC) Composition 29 member organizations Half represent sellers, half represent buyers Members include AH&LA, IACVB, and MPI

    9. 8 Convention Industry Council (CIC) Purposes Facilitate cooperation between meeting hosts and meeting planners Recommend solutions to industry problems Recommend a consistent basis for handling convention procedures Develop programs to serve the industry and the public Create an awareness of the magnitude of the industry

    10. 9 Contract Standardization and Multiple-Meeting Contracts Contract Standardization Already in place for some chains Some planners’ objection: meetings are unique Also standardized: event résumés, banquet event orders, billing procedures, and more Multiple-Meeting Contracts Used by both corporations and associations Benefits: efficiency in negotiations and planning, guaranteed business for hotels Drawback: lack of flexibility to seek most profitable market

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