A growing frustration for meeting planners, when managing their conference budgets, are excessive or undisclosed fees imposed by providers of essential services. Conference facilities are such a provider. Many facilities impose fees in an effort to block outside suppliers from servicing conferences, in turn forcing the use of in-house suppliers.
These exclusionary practices and policies are becoming prevalent with audio visual services. Most conference facilities have an official audio visual supplier who pays a commission to them for the services it provides in-house. This official status rarely grants the in-house supplier exclusive rights, thus allowing outside supplier access to service their clients. The outside supplier fee comes into play when the facility charges the conference a fee for utilizing their supplier of choice.
Interference by facilities in a meeting planner’s choice of audio visual supplier is not acceptable. It restricts the planner’s ability to choose their AV supplier based upon what is best for their conference. The planner should not be forced to potentially compromise the quality of their conference and/or to relinquish control of the cost of their AV services.
Here are some ways to mitigate and manage outside supplier fees:
- Negotiate before signing - The best time to deal with outside supplier fees is before your facility contract is signed. You have the greatest leverage when you still have the ability to take your conference elsewhere. Once a contract is in place you lose your leverage and will find minimal success negotiating with uncooperative properties.
- Focus on the entire spend – Outside supplier fees are typically a small percentage of the entire spend by the conference. Keep the overall value of the contract at the forefront during negotiations. This will serve as a reminder to the facility of what they stand to lose by not complying.
- Insist on transparency - Communicate to the facility that you expect full disclosure of all potential charges before the contract is signed. Do this in writing by email or by including notification in your RFP. Keeping a written record will place you in a position to better negotiate when any undisclosed fees arise later.
- Include clause in RFP - The Exhibition Services and Contractors Association, in their 2008 ESCA Position Paper on Freedom of Choice designed a clause on the “buyer’s freedom to choose third party suppliers.” Include this clause in your RFP and give preference to facilities that indicate compliance in their proposals.
- Budget for them - Budgeting for outside supplier fees will ease the pain of unforeseen charges. Any unused amounts can be redirected for contingency or will help place your conference in a surplus situation.
- Don’t concede easily – It is common for facility contracts to indicate that charges “may apply” if an outside supplier is utilized. Approach the outside supplier fees as negotiable if they are not specifically detailed in the contract.
These are some simple strategies for mitigating outside supplier fees. In some cases, where the contract is signed, and you are facing excessive fees it may warrant consulting legal counsel. Some facilities are implementing policies and practices that may be breaking anti-competition laws. Such laws were put into place to ensure a free and competitive marketplace and to protect your right to choice.