Six Continents Standardizing Mtg. Contracts

Six Continents Hotels is beginning an initiative to develop standard meeting contracts for some larger clients of its transient offerings. In exchange for becoming the first choice for meeting sites, the hotel will give a percentage discount off the negotiated transient room rate for guest rooms used during events.

Given that a great majority of Six Continents hotels—Crowne Plaza, Inter-Continental and Holiday Inn—are franchised, the deals would include the ability for franchised hotels to reject a meeting but not to change the terms of the standard contract, said Six Continents director of meetings Alyssa Smythe.

The standard contract also could include clauses that allow buyers to rebook canceled meetings at the property or within the brand during a specific timeframe and the ability to restrict meeting bookings by the corporate client's competitors during the client's events, Smythe said. It would not include specific guest room rates or volume commitments. There also would be no guarantee of meeting space rental rates. "That's on buyers' wish lists, but I can't say that it would be standardized for each agreement," Smythe said.

The chain has negotiated about five of these deals with some of its larger clients, three of which were completed very recently. Smythe said the impetus for the initiative is the economy-driven desire of many corporate clients to reduce their roster of preferred suppliers, and the ability of Six Continents—which sells by product, not by geographic zones—to negotiate for meeting space worldwide through one point of contact. "We want to partner with our counterparts in the corporate travel segment to penetrate existing transient volume agreements," Smythe said.

There always has been a difference of opinion among both buyers and suppliers about the value of multiple-meeting, volume-based or standard meeting contracts: Proponents point to better budget forecasting and easier short-term booking, while opponents note the difficulty of forecasting meeting expenditure and hotel seasonality concerns. However, Smythe said the goal of this initiative is to become the buyer's first meeting site choice, not to directly gain a specific volume. "We find this is more prudent than making a dollar or volume commitment," she said. "These relationships exist already on the transient side, but why not expand them to grow market share? Ultimately, we have to see what the company can deliver, but it's different on the meeting side."

The opt-out ability of Six Continents franchised properties is an important aspect to the initiative. "A hotel can choose not to take a meeting, but if they do take it, they must agree to the standardized terms," Smythe said. "In order to play, clients must agree to that concession."