How to make hotel food and beverage minimums work for you

Posted by Mike Mason

Feb 20, 2012 3:47:00 PM

Banquet events (i.e., catered breakfast, lunch, and dinner) are kind of the glue that binds the entire meeting together. They provide the opportunity for attendees to take a break, come together, and create bonds. It’s here where much of the day’s sessions are put in perspective, discussed and debated, and where the real value of the event often begins to take shape for each attendee.

It’s also where a fair portion of your meeting budget is spent and where hotels make a fair amount of their profit. In order to protect this other revenue stream, hotels include a minimum food and beverage spend in their contracts. This is simply the minimum amount of catered food and beverage that you’re required to spend during your meeting. (Sorry, no restaurant or bar spend applies toward the amount.)

Here’s what’s interesting about this number. Because it sits in the contract and is viewed as a liability, most planners work hard to negotiate it down (or out completely), even if the actual catering budget of the meeting will clearly exceed it. That means, when your meeting arrives and you actually do spend more than the food and beverage minimum, you’re not getting credit for the difference. Sure, you’ve lowered your liability, but at what cost to the organization?

What would happen if you viewed the hotel’s food and beverage minimum differently? Instead of a liability, try seeing it as a benefit that, with the right meeting, could help drive better value from your hotel partner.

Tip for managing Food and Beverage minimums:

If your meeting’s catering budget exceeds the hotels food and beverage minimum, increase the number in the contract in exchange for additional concessions and savings.

The point here is that you’re committing in writing. That goes a long way for building great value around your meeting. So how would this play out? Let’s role play.

    • 50 rooms/50 people for 3 nights

    • Your food/beverage budget: $16,500

    • Hotel’s minimum: $12,000

    • Difference: $4,500

This additional spend of $4,500 means you could have real leverage to add some value to your overall meeting. Need additional suite upgrades? How about IT help? Whatever you might be missing from your bag of goodies can be leveraged now that you’ve committed to spending beyond the hotel’s minimum.

Is there risk in this? Sure. You may find that after committing to the additional spend, your budget is cut. The good news is that as a result of  this extra step in negotiations, you have a record of what you traded for a higher spend. In other words, let’s say you were able to get an additional couple of suites and some A/V concessions for the extra $4,500 in spend. If you have to reduce it down later, you know exactly what you’ll give back in return.

Other tips/thoughts:


    • If you have the history of what you have spent in catering or in outlets, share it with the hotels. Next time you operate a meeting, ask your host hotel if there is a way for them to track your F&B spend. It’s always helpful to have this handy!
    • If you were planning on taking a dinner off-site, can you keep it on-site?
    • Often times, hotels charge a room rental fee to make up the shortage of F&B spend. Why not take that fee and apply to your food budget and get something in return?

The key point here – as is with most of my Monday Zmails – is that you have at your disposal some very compelling ways to build strong value for your meeting. Feeding hotels the right information and offering to step up certain commitments within your control, will keep their tummies full and your budget in control.

 

FB_minimums_ebook_mockup_standing_-_sm.png

Download our FREE

Meeting Planner Guide 

To Food & Beverage Minimums

 Download the free guide and you'll learn to:

  • How to leverage your F&B spend
  • Ways to negotiate the minimum
  • What you can do if you miss your minimum

 

Topics: RFP Tips, Negotiations