The U.S. lodging industry is expected to decline by approximately 13.7 percent in sales within 2009 as a result of the worsening economic situation in the U.S., but also in other major financial markets. Organizations that organize corporate events automatically acquire an advantage in terms of negotiating the hosting of an event at a particular facility. Hotel managers need to meet specific sales targets. Yet, to effectively negotiate with hotel managers, event planners need primarily to convince them about the value of their business so that they make them willing to negotiate in their favor.

One of the most commonly applied policies to reduce the cost of hotel accommodation is to hold multiple corporate events every year at the same facility. As lodging demand is severely declining, hotel managers offer competitive prices for repeated corporate clients. The frequent guest programs enable hotels to continually understand their customers’ needs and stay competitive. In that way, not only they increase their sales figures to meet their sales targets, but they also offer event planners a better negotiating power in leveraging better corporate rates. Besides, they often offer hotel restaurant discounts and free hotel stays.

Organizations that hold corporate events are, typically, offered discounted corporate rates up to 10 percent from the published room rate from the majority of hotel chains. Discounted corporate rates function as an incentive so that corporate clients become repeated customers. From the organization’s perspective, discounted corporate rates are, in effect, a cost-effective method to hold a corporate event at a familiar place, but also to get additional deals such as reward credit cards.

Besides, event planners can negotiate additional discounts on guest rooms. Guest rooms offer a higher profit margin to hotels and consequently a better negotiating power to the organization. Typically, organizations compare the prices of the guest rooms against the prices of the corporate contract and secure the lowest possible rates.

In order to manage corporate expense policies, organizations set hotel rate benchmarks. Employees who are responsible for corporate travel bookings should have a price range of acceptable hotel rates so that corporate travel expenses are kept within limits. However, employees should be given a relative flexibility on deciding hotel corporate rates because of the price fluctuations in different geographical areas.

Another way to reduce hotel accommodation costs is to negotiate food and beverage rates. Typically, hotel restaurant menus are designed to meet any taste and budget. However, in order to have a negotiating power, it is better for the event planners to identify preferred food and beverage in advance and get discounts on the additional price.

Event planners can also negotiate the total expenses of the event held. The event held at the hotel is, in effect, an investment on behalf of the event planners at the hotel property. The hotel will benefit from the investment from the income generated from accommodation, food and beverage consumption and any other type of service provided. Therefore, event planners can ask for further discounts on the total cost of the event.

Finally, it is to the best interest of the event planners to hold the event during non-peak times. In that way, they offer the flexibility to the hotel sales to book better rooms at a lower rate and to arrange for the best services available. In this case, the event planners are aiming to cover the small space in time that the hotel has available and doesn’t anticipate covering, and they acquire better negotiating power in getting lower rates.