Considering Multi-Year Contracts
By Dawn Belton, CMP, Meeting & Event Manager and Deirdre Bourke, CMP, Account Executive, Conferon

For some, the idea of signing a multi-year contract may seem like quite a commitment. But the truth is, the advantages usually far outweigh any disadvantages. And in today’s environment, they are easier than ever to negotiate.

Multi-year contracts usually offer a variety of advantages to all parties involved. The primary benefits of signing any multi-year contract include team consistency and long-term relationships. Vendors and hoteliers get to know your meeting, the people, and its special needs, and are better able to offer suggestions concerning future meetings. Staying with the same companies for multiple meetings also saves valuable time for meeting planners with the process of researching, recreating RFPs or negotiating contracts with hotels and suppliers year after year.

With regard to hotel chains, the primary advantages of obtaining a multi-year contract are value and flexibility. Planners may be able to secure prime locations for clients at specially discounted rates, and overall contract terms may be more flexible. A chain may offer a great deal or more flexibility at one of their most popular locations if a client will also book another meeting at a less popular site at the same time.

What about booking a multi-year contract with the same city? The benefits can include preferred dates, better hotel packages and better convention center pricing for your meeting. When working with vendors, multi-year contracts may provide greater leverage in negotiations due to purchasing power, flexible contract terms, and concessions.

As with any situation, there are also drawbacks to multi-year contracts, which should be considered before making any final decisions. For protection purposes, it is always highly recommended that an “Out” or “Annual Review” clause be placed in the contract in the event that the planner or client becomes dissatisfied with the service levels or if the meeting requirements no longer match the facility or vendor. These clauses are intended to assure a mutually-satisfying relationship for both the client and the hotel/supplier and are usually a welcome addition to the contract.

So when debating the value of signing multi-year contracts, just think of all the other tasks you can accomplish with the time you will save.