You’ve heard it said before: face to face time is the best way to build and maintain relationships. But meetings can be expensive. Really expensive. The bills come in, and you’re struck with the thought of “I did the math before the meeting! Where is this gigantic number coming from?”
To help wade through the endless 0s and commas in your bill, here’s my list of top ten reasons your meeting budget didn’t go as planned (plus stick around for a bonus tip at the end).
10. Parking: Where are you hosting this meeting? Depending on the area, city hotels rarely own their parking facilities anymore. It’s harder and harder to find discounted prices on parking, so do your best to get a discount while you negotiate your original contract. Don’t forget to include this figure in your budget!
9. Transportation: Let’s say it again: location! To give you an idea of prices based on location, I did a fun little price check with two random cities. Departure on Monday and return on Wednesday ticketed two weeks in advance:
● Newark to Indianapolis: $189
● Newark to Cleveland: $419
Now THAT’S a price jump. If your budget is especially tight, it might be a good idea to move cities. Keep in mind that airlines are posting bargain basement rates online, so your original booking price may double once you’ve added *baggage and a seat assignment. But I heard United Airlines has started serving free stroopwafels again, so you have that going for you.
8. Bottled Water: On average, a bottle of water in a hotel meeting space is $5.00. Add *tax and fees and it ends up at $7.50. If everyone has one bottle a day for three days, and you have 200 people, quick math says you spent $4,500. On water. A great alternative is setting up water stations around your meeting space, and many hotels accommodate by setting these up at your break in the back of the room. A nice touch is placing pitchers of water scattered around different areas with lemons, cucumbers, or other nice fruit floating in it. It’s free and much better for the environment.
7. Internet: Driving down the highway, you’ll see many hotels giving away free in-room internet. So why did you get a bill for *$25,000 for wireless internet for your group? Internet is an easy sell for the hotel, and every group wants to make it available for their attendees. The problem is that the internet has become an important revenue stream for hotels. The bandwidth is already in place, and they can sell it over and over again. There are a few solutions, but your fabulous meeting planner can negotiate it out before you sign the contract. This is generally handled through the audio visual department, so you might need to contract it separately.
6. Resorts Fees: Here we go! These are the bane of the planner’s existence as they are often non-negotiable add-ons to the price of your room. They range anywhere from *$25-$150 per night per room, and the list of inclusions varies. In a city hotel, you can assume the internet, an in-room coffee pot, and access to the hotel gym and pool will be covered by this fee. But weren’t those always include in the room rate? Yes! In order to compete with hotels.com, expedia.com, and other discount sites, hotels must show the lowest rate they can get away with. The hotel doesn’t need to apply the fee to their reports room rate as they can allocate it any way they want. It keeps their average price per room lower than the competition. There are currently no laws in place requiring hotels to advertise their rates with the fee included. In fact, you may not realize your room just cost $50 more per night until check out. Fun, right? Now let’s do the quick math again: $50 plus *tax x 200 people x 3 nights…yikes. It’s not just an extra $50. It’s an extra $32,000. This is a pre-contract issue that’s hard to get around, so make sure it’s clearly laid out in your contract before signing. I can help negotiate that for you
5. Attrition: When you contract for a meeting, you’ve contracted for x number of rooms per night. This means you’ll pay for everything *plus tax whether people show up or not. Fewer people registered than expected? Attrition. Company lay-offs? Attrition. Budget cuts? Yep, attrition. You can negotiate a percentage of “slippage” into your contract, and a meeting planner can help take this a step further. There are some tricks of the trade that can help mitigate these costs, and your meeting planner can help navigate them.
4. Unions: On the one hand, you want to ensure the hotel staff is knowledgeable professionals who are being paid and treated fairly. On the other hand, unions can cause skyrocketing prices at your meeting. Always expect the unexpected! A lot depends on the city and its union policies. A city like New York is going to adhere to each policy and fee, and you could add thousands of dollars *plus plus to the cost of your meeting. Do your research (or ask me to do it for you). While we’re working on research, I can tell you about that one time the Teamsters locked me in a meeting room because I moved a chair.
3. Power: Everyone needs their laptop plugged in? Seems like a normal request. After all, a hotel cannot legally charge you for electricity. But they can charge you for extension cords, surge protectors, and the staff to set up and break up! Oh, and the electrical tape. They’ll charge for that. Renting surge protectors can average $25 each per day, *plus plus. You or your planner might want to bring a big box of your own. Make sure it’s addressed in your contract or the in-house AV department may be able to charge you a fee for bringing these items in.
2. F&B Minimums: This is a huge item in your contract! Get the menus beforehand and figure out what you’ll spend pre-tax. Then take another 20% off of that number and that should be a good F&B commitment. You’ll want that number to be as low as possible so you have some flexibility if your plans change. There is no food and beverage maximum-and you can always add. The most important thing to remember is that the minimum numbers are pre-*tax and service charge and your meeting planner knows how to figure out a good minimum.
1. Coffee: Oh lord, coffee. And decaf. And tea (AKA hot water.) My personal record or highest price was $190 per gallon, *plus plus. This isn’t to say you shouldn’t have coffee (I mean, come on. Riots will happen). Let your meeting planner negotiate a full day beverage break at a per person price. That way you’ll know how much you’re spending.
Bonus tip! Did you notice all of those *asterisks*?
Every one of the tips above mentions tax and service charge. Those numbers you see when you look at the menu? Those are quoted without service charge and tax. Everything at your meeting has an additional service charge and tax, and those numbers are high and varied.
Back in the day, service charges were called gratuities. However, more and more staff do not receive any of that money. Your service fee may or may not be considered a fee for service. I recently received this response when asking a hotel sales person about their 25% service charge and how it would be allocated. Below is her response, cut and pasted from her email:
“We do not offer a service charge at our property. The administrative charge is a revenue for the hotel. We choose to compensate our employees comfortably though other avenues”
Yup. As you’re looking over the numbers on your proposal, menus, and your AV and other price lists, keep in mind those numbers are net and the added fees can be as much as 35%.
Hopefully, these budgeting tips will help bring some understanding of how quickly your meeting spending can exceed your budget. To maximize saving across the board, be sure to work with experienced planners like Stellar Meetings and Events. We negotiate dozens of event budgets every year and have the inside knowledge and industry purchasing power that’ll help save your budget…and sanity.