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Is an association management firm focused on helping Non-Profit associations succeed in their mission.

Non-profit Organizations–Negotiating Hotel Contracts

Another in a series of articles related to association management selected from our reading list by:
Robert O. Patterson, JD
CEO/ Principal
The Center for Association Resources, Inc.

Managing a non-profit organization can be a unique challenge for even a well-seasoned corporate executive from the private sector. While non-profits seem quite similar to their for-profit counterparts from the vantage point of the organization’s membership, those in managerial positions soon recognize that many key aspects of non-profit governance vary greatly from that to which they are accustomed.

For example, non-profit organizations provide immense value to the communities they serve in the form of meaningful work and improvement in the quality of life. Yet despite the magnitude of the services they provide, operating budgets for most small non-profits are often under $500,000–minuscule in comparison to the services they provide. This paucity of funding leads to the need for enormous amounts of creativity and flexibility on the part of the management team.

At the same time, the management of non-profits often falls into the hands of inexperienced non-management personnel, in large part due to the lack of available funds for recruitment and remuneration of experienced leaders. This is not always a negative; with the proper training and support, those new to management roles can bring a much needed fresh perspectives and insight into the board rooms of small and large non-profits.

Despite the unique challenges they pose, non-profits nevertheless offer the opportunity to bring together people who share common values, an enthusiasm for community action, and the entrepreneurial spirit necessary for the successful maintenance of any organization–something that quite a few experienced managers find exciting.  Ironically, however, one of the greatest obstacles the non-profit manager faces is finding the ways and means to accomplish the kind of joint collaboration that is essential to keeping these critical stakeholders energized and motivated. Regular meetings involving both management personnel and the organization as a whole are absolutely necessary to keep any non-profit functioning with maximum efficiency.

In most instances, full membership meetings of small non-profit organizations occur only once or perhaps twice each year. Usually in a hotel or, depending on the proximity of the organization’s “home base” and the number of projected attendees, a large motor lodge. The reasons for this are fairly obvious; hotels are already equipped with nearly all of the pre-requisites for a successful annual or semi-annual membership meeting: meeting rooms, restaurants and catering capabilities, sleeping quarters, and adequate parking and/or airport shuttle service.  Unfortunately, these are also the reasons why negotiating a contract with a hotel or even a smaller motor lodge for these types of meetings can be so challenging.

According to Whitney Archibald of Exhibitor Magazine, the negotiation process for securing an affordable deal with a desirable location should begin before the non-profit manager even speaks to the hotel event coordinator, when the management team designates the person who will be responsible for negotiating with the venue.

Once the person doing the negotiating has been chosen, both Archibald and Joan Eisenstodt, chief strategist of Eisenstodt Associates, suggest that the management team write its own contract (in collaboration with the firm’s attorney.) Even if the hotel rejects the contract out of hand, the experience will help your team to hone in on exactly what you want from the hotel as well as what you do not want. This approach also allows you to be proactive in including any areas that were problematic for you in other settings.

Of course, it stands to reason that you should also get everything in writing, right down to the color of the napkins on the hors d’oeuvres table (some venues will charge extra for any color other than white or the dining room’s “signature color.”) Do not assume that because something was discussed verbally it will be included. While an oral contract may be legally binding, a written contract is always the best protection for your organization.

Part two of the above–read the contract carefully. Many hotels charge fees for items about which most of us would never think to inquire, and these fees are very often open to negotiation. Items such as maids’ fees when your group will only be staying in the hotel for a single night, tips for the wait staff that are built directly into the price of a meal, or penalties for early or late check-in are all items that usually can be successfully negotiated if you know about them before you sign the contract.

Think about amenities. Very often you can negotiate the use of hotel amenities for your group for free if you do a bit of homework beforehand to see what amenities your group might enjoy. Some hotels may allow free use of the pool and hot-tub but charge prestigious fees for a massage. If your group is small and you don’t plan on using the pool, for example, perhaps you can negotiate free neck massages for anyone who wants one on the first afternoon of the event. On the other hand, if your membership does not mind giving up some amenities, you may be able to use that fact to negotiate a lower room rate or a free continental breakfast.

Another suggestion is to never, ever pay for the use of meeting rooms. Virtually every hotel has more meeting rooms than it ever uses, or it uses them once a year for a single event. You can easily capitalize on this knowledge. Offer to hold break-out groups in the smallest meeting rooms for free, rather than paying to hold a single discussion group in the one large room available. This leaves the hotel the option of scheduling a profitable last minute meeting in the larger conference room; you save money, and your attendees will most likely be more productive.

Finally, think ahead. It is almost always less expensive to book a hotel a year or even more in advance. If your organization has been around for a few years and your membership is stable, or growing at a relatively stable rate, it is reasonable to assume it will continue to do so. Furthermore, as long as you give the venue enough advance notice, you will rarely be penalized if you need to add or remove attendees shortly before the event. Most meeting places require thirty to ninety days notice of cancellation in order to avoid a penalty.

Remember, too, that the recession is still taking its toll on the United States and world economies. Rates for almost everything in the hospitality industry are significantly lower than they were a few years ago and it is safe to predict that they will increase as soon as the economy stabilizes. Do not be afraid to capitalize on this by reserving ahead, thereby locking in your rate a few years in advance.

Obviously, managing a non-profit organization is a tremendous challenge no matter what your vantage point. Whether you are a manager trying to maximize your available funding, a community liaison locating and recruiting new members, or a meeting coordinator working to creatively negotiate the use of affordable venues, working in the non-profit sector offers untold opportunities to make an important contribution to your community.  Keep up the good work!
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Filed under: Association Resources, Center for Association Resources, Leadership, Non-Profit, Strategic Planning, Strategy, The Center for Assocation Resources info, Training, , , , , , , ,

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