In the first of a regular series of blogs from the Robinson College Conference Team, we look at the hot topic of venue contracts. Nick Milne, Conference & Catering Manager explores the contracts minefield, emphasising their importance in protecting the interests of both venues and clients.
In the current climate, we’re finding more and more that clients can be reluctant to commit to their booking, certainly more than a year out but also months and even just weeks ahead. They may want an event ‘pencilled in’, even ‘confirmed’, but don’t want to go to the next stage of securing the event in the form of a signed contract. With economic uncertainty still very prevalent, this reluctance is understandable, especially if there is a risk of what they perceive to be punitive charges in the case of outright cancellation or shortfall in numbers.
From the venue’s perspective - and Robinson College is no different from any other - this can pose a problem. Provisional bookings (as that’s essentially what they remain) may end up releasing in the end, having in the meantime prevented us from considering other, potentially more definite enquiries. I know that one could regard a verbal confirmation as an un-written contract but at best it’s messy and at worst, wholly inadequate for large conferences.
It’s a dichotomy that both venue and client struggle with and yet it need not present an insurmountable hurdle, if we are both prepared to view the contract as a pivotal part of the arrangements in a partnership.
How does that work? Crucially, this is about looking for areas that we can find agreement and so we need to understand each other’s needs. The client wants the space protected until such time as they are able to make a final decision and the venue wants certainty around the business that is being booked.
So in the first place, this is a question of time - time between enquiry and (verbal) confirmation; time between confirmation and contract completion; time between enquiry and arrival dates. Lead time plays a significant part here. Not just the lead time for this particular event, but also the venue’s experience of average lead times for other bookings that could be considered for the same dates and space. The client needs to recognise that the venue cannot block space and turn a blind eye to other enquiries in the assumption that their booking will in fact come to contract. And the venue needs to recognise that decision-making can take time.
So second, it’s about the decision-making process. What is the process, who’s involved, who will make the final decision and when will that be? From the venue’s stance, we’d like direct access to the decision maker to be sure that we understand all of the factors and have a chance to present our best offer. The client may well be protecting the decision-maker from precisely that kind of hassle. Nevertheless a discussion about the process and likely time-scales is vital to achieving mutual understanding. If the venue has an idea of the time frame involved, it can make a reasonable judgement about whether the “waiting time” before commitment, is commercially acceptable.
Third - this is about the scale of the commitment. How many delegates, needing how much space and how many bedrooms, over what duration and at what charge? Is the booking worth a few hundred pounds or many tens of thousands? Inevitably, the larger the event, the longer the decision-making process will be and of course the more worthwhile it would be for the venue to be patient. Equally of course, the larger the event, the longer the lead time required to replace it.
Finally, the business relationship between the client and the venue will be a determining factor in how this process is handled. A new client or venue is untested and unproven. Conversely, for those that have worked together before, the knowledge each has of how the other works, their reliability and the trust they have in each other will all determine the strength of their relationship. Clearly the desire to work together is about not just this booking but more in the future and the goodwill that exists is significant in shaping give and take.
However, when all is said and done, both parties need to feel comfortable with the contract and the terms and conditions that will apply. So how do we approach this sticky wicket?
Of utmost importance is a well-trained and knowledgeable team who can speak competently to the client and provide reassurance about any areas of concern. There’s nothing to beat a properly documented, systemised approach to the whole enquiry-contracting- event management procedure. That way, everyone knows what’s happening and things don’t get missed.
Terms & Conditions are too often hidden away and only brought out right at the end. I think it’s a big mistake not to introduce the T’s & C’s right at the outset, accompanying your very first proposal. That way, you show you are professional and serious about business. Make them easy to understand, as simple as possible and in English rather than Legalese. Wherever possible, there should be specific T’s & C’s for different types of events. Weddings are different from conferences are different from training courses are different from banquets so wherever possible, venues should aim to make the T’s & C’s relevant.
Thinking back to the notion of the contract as a pivotal part of the arrangements in a partnership, we need to think here about any conditions that the client may wish to include. Almost every venue will recognise this situation – you’ve discussed and negotiated, added and amended, issued the contract and re-issued it and then, just when you thought the deal was in the bag, the client produces their own contract and T’s & C’s. Wow! Well, the MIA Model Contracting Process recommends that venues offer to negotiate on the T’s & C’s right from the outset and encourage clients to make proposed amendments and additions. Offering the T’s & C’s in a Word format rather than a pdf enables the client to edit easily. Of course, the venue still has the ability to reject this “counter offer” so control isn’t being given away. Flexibility is the watchword and its far better to manage this right at the beginning than have to deal with the curved ball at the end.
What about the Contract itself? Clearly this is the engine room of the agreement as it houses all of the details pertinent to the booking – who, when, where, how, why and how much. The bigger the booking, the more complex the document, the smaller the meeting, arguably the less detail that will be required. However, in all cases, be sure to be clear about the administrative stuff – who are the parties and how do we contact each other and importantly for everyone’s accounting routines, is there a requirement for a Purchase Order and to whom does the invoice go.
The question, perhaps a bit more tricky is, the volume that is going to be contracted and that, in the final analysis, may be just the reason why the client is reluctant to sign on the dotted line. They are hoping to have 200 delegates but are worried about committing to more than 100. How big a conference room, bedrooms and dining space is the venue prepared to hold on a provisional basis for the client, without it being covered by the contract. Well the decision on this comes back the same points above - lead time, decision-making, the size of the commitment and the relationship. And all of that comes together to pose another question. What’s the risk for each party?
Risk is determined by so many factors. What type of event is it? Who are the delegates? Are they being sold to or told to? Where are they coming from? Is the client organising everything or are the delegates booking their own accommodation? And so on and so forth. Forming a view about how much risk each party is taking and therefore the worth in the end is what is essential to be able to reach a conclusion.
And so in the end, what all of this comes down to in my experience is transparency. Frustrations arise when contact can’t be established, when answers aren’t forthcoming or when people are too busy or too focused on their own requirements to come to grips with the matter. It’s vital to talk opening to each other in detail from the very beginning, to understand each other’s expectations, needs and concerns and to approach the matter as a partnership for mutual benefit.
If this happens, it benefits both parties. It clarifies the undertaking from both sides, it releases provisional diary bookings to make room for new enquiries and there is no misunderstanding later on. Signing on the dotted line is a good thing!