Key Aspects Hotels Consider When Evaluating Your Business
As an Event Management and Venue Sourcing expert, I often find that clients either don’t fully
understand the value of their business or wonder why hotels aren’t clamoring to secure their event.
With 16 years of experience in hotel sales and Conference Planning, I can tell you—there is no one-size-
fits-all answer. Your friendly, enthusiastic sales representative is not the decision-maker; rather, it’s the Revenue Management team pulling the strings. These professionals analyze competitive markets, historical data, and computerized projections. They don’t prioritize your brand loyalty or total hotel spend elsewhere—what they care about is maximizing revenue. So, how do you secure the best rates, valuable concessions, and favorable contract terms? By presenting your business in a way that speaks to their revenue-driven decision-making process.
Factors That Determine Your Value to a Hotel
1. Room Rates & Seasonal Patterns
Hotels strategize their bookings like a puzzle, optimizing revenue by layering multiple groups. For
example, in a downtown business district, hotels may prefer Monday-Thursday and Thursday-Sunday
patterns, whereas resorts in mountain or tropical locations might prioritize Sunday-Wednesday and
Wednesday-Sunday bookings. Peak and shoulder seasons also play a role—Arizona may offer attractive
rates in spring, but monsoon season could impact your event.
2. Room-to-Space Ratio
Hotels evaluate how your required meeting space compares to the number of guest rooms in your
block. If they’re hosting a citywide event with minimal space needs, they may be more willing to
accommodate your space requests. Conversely, if you’re booking 12-18 months in advance with no
competing groups, hotels will prioritize a strong balance between meeting space, room rental, and Food
& Beverage contributions.
3. Citywide Events & External Factors
Hotels consider what else is happening in the destination—Summits, large Meetings, concerts, or
sporting events can create citywide compression, allowing them to increase room rates significantly. If
you’re planning an Incentive Retreat in a leisure destination, be aware that peak leisure travel could
drive up rates beyond what group business typically pays.
4. Hotel Size & Service Levels
Size matters. Larger hotels in competitive city markets often maintain consistent pricing due to market index comparisons, whereas boutique or luxury properties set rates independently. A 100-room block at a 200-room hotel is far more valuable than the same block at a 1,600-room hotel, where major groups are defined as 1,000+ peak-night rooms.
5. Food & Beverage Contributions
Hotels rely primarily on room revenue, targeting a 4:1 ratio of room revenue to catering sales. However, high Food & Beverage spend can boost your negotiating power, particularly when aligning with a hotel’s revenue needs. Smart event planners calculate estimated catering spend using menu pricing before agreeing to high minimums. Additionally, hotels profit more from room rental fees (about 80% profit) than from catering (typically 35%). If your Food & Beverage minimum is expected to exceed their requirements, negotiate higher catering spend in exchange for waived room rental fees.
Maximizing Your Concessions Package
Hotel’s willingness to offer concessions depends on their need for your business. Luxury properties may
avoid offering them entirely, while mid-scale hotels use concessions to secure valuable groups. If you
receive a weak initial proposal, it may indicate low hotel interest or an inexperienced sales manager.
Commonly negotiated concessions include:
- 1 per 40 comp rooms – A complimentary room for every 40 rooms booked.
- 10% discount on Food & Beverage – Typically for spends over $20K.
- Audio-Visual Discounts – Consider external AV vendors for better service and cost, but
negotiate waived fees for outside AV use or at least 10 comp WiFi connections. - Stage, Podiums, Easels – Some hotels charge for these, so clarify costs in advance.
- Pre/Post Night Flexibility – Attendees often extend their stays, impacting attrition calculations.
Final Thoughts: Leverage Your Value
Understanding how hotels evaluate your event allows you to make informed decisions about location,
seasonality, and contract negotiations. Whether planning a Conference, Summit, or Incentive Retreat,
knowing the factors that drive hotel decision-making ensures you maximize your event’s value. Your
business is valuable—let’s leverage it strategically!
