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Venue Negotiations: Everything to know before signing a contract

Comparing pricing for potential event venues is a more complex process that let’s say…deciding whether to shop at Albertsons versus Whole Foods. With your groceries, you can pretty easily compare the price of produce to determine the best fit for your budget and value needs. With venues, apple-to-apple comparisons, often look more like a whole apple with a requirement to also purchase a jar of bougee nut butter as opposed to a pre-sliced apple that comes bundled with a peanut butter packet, multigrain bread and sharp cheddar cheese but has a weird grab-n-go tax you’ve never heard of applied to it. Let’s just say…it gets complicated with venues.


Venues utilize a variety of different pricing structures depending on the event format, the amenities they offer, their rental rate standards and even the season. In addition to just the venue rental pricing, it’s important to evaluate the features and added value benefits of each location as those can deduct from outside expenses you would occur or, on the other hand, add to the guest experience elevating your event overall.


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Let’s start out by first reviewing the three most common venue pricing structures.


FIXED OR FLAT RATE

This is the most intuitive structure and is found most often in venue spaces that do not have on-site food & beverage facilities. The venue offers you a fixed rate to rent the venue space.


Example: A Downtown Warehouse space is charging you $6,000 venue rental day rate for their space. This venue does not have on-site food & beverage and you will need to work with a 3rd party caterer.


FOOD & BEVERAGE MINIMUM

Minimums can require a bit of math and sometimes a bit of risk. Rather than offering you a fixed or flat rate, the venues will provide you the space for free (yes…free!) provided you meet a defined threshold in your food & beverage costs.


Example: The San Diego Hotel is offering you the California Ballroom with no venue rental fee if you meet a food & beverage minimum of $20,000. You already know you are budgeting $75 per person for food & beverage with 300 attendees so you can expect $22,500 in food & beverage costs, surpassing the minimum requirement. Alternatively, if you are not providing food & beverage to your guests, but instead having a cash bar where guests need to purchase beverage themselves, this offer might not look as favorable. If you were to estimate 1.5 drinks per person at $10 a drink, you would only have $4,500 in food & beverage sales and would not meet the food & beverage minimum.


If you’re in a situation where it’s possible you might not meet your Food & Beverage Minimum, make sure the terms outline how this is reconciled with the venue in the end. Do you have the option to settle to an agreed upon Flat Rate or will you need to make up the difference between actual Food & Beverage sales and the minimum?


Play out all the possible scenarios and make sure that you understand the financial commitments and risks involved.


FLAT RATE + FOOD & BEVERAGE MINIMUM

Like it sounds, this is essentially a combination of the above two pricing structures. A venue will charge you a fixed flat rate rental fee for the event plus you must meet a food & beverage minimum.


Example: The San Diego Hotel is offering you the California Ballroom at a $4,000 rental fee plus a food & beverage minimum of $16,000. Just as in the above, you are budgeting $75 per person with 300 attendees so you can expect $22,500 in food & beverage costs, surpassing the minimum requirement. In this scenario, your event is now paying for the same amount in food & beverage (Despite the lower minimum, your budget for food & beverage costs per person has not changed.) AND you now have to pay a flat rate fee.


This combination pricing method does not always come at a disadvantage to the event organizer though. Especially when working with larger budgets for food & beverage, adding in the food & beverage minimum component to a fixed rate negotiation can help you to get the fixed rate cost down.


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Now TBH, reviewing the pricing terms for the venue rental can be the most simple components of venue comparisons to review. Once you start layering on the amenities and additional costs that each venue offers, you start to get the larger picture of the value each property brings as well as projected expenses.


We highly recommend utilizing a venue comparison spreadsheet to get a side-by-side look at various factors of venue rentals. You can download a free spreadsheet template below.


Here are a few areas of consideration in venue rentals that you might be overlooking in your proposal and negotiation process.


EQUIPMENT

Each venue is going to provide a certain level of infrastructure at no cost for the event. Many venues also offer additional equipment rental for a fee.


Example: The warehouse space you are looking at does not have any tables and chairs to offer on-site. You will need to source all other equipment from outside vendors. They do have a full working kitchen for your caterer to use.


Example: The hotel ballroom space comes with their standard tables and chairs and well as house linens and napkins. They charge a per unit fee for use of patio heaters and easels.


Even though it might be early in your planning stages, create a draft list of all equipment you will need for the event and compare it to what the venue is going to provide or rent to you.


Some items to consider:

· Tables

· Chairs

· Linens

· Napkins

· Candle Votives

· Easels

· Table Stanchions / Table Easels (used to hold table numbers and other table top signage)

· Stanchions

· Lounge Furniture

· Podiums

· Heaters

· Staging

· Audio Visual*

· Kitchen Equipment

· Wifi


*Hotels often have an in-house PSAV team that you must use for power & rigging. Get quotes for these services in advance to make sure the costs are factored into your venue comparison correctly.


ADDITIONAL SPACES

Be comprehensive in your space needs when evaluating venues and make sure your contract includes all additional spaces you need to fully execute your event. Often, if you are renting a large space within the venue, they will provide auxiliary spaces for now additional charge. You might need additional space for breakout sessions or cocktail receptions but also consider your BTS needs….an office space, supply room, volunteer break room, green rooms, etc.


If you’re looking at hotel venues, also consider your hotel room needs. See if you can get a few complimentary rooms included in your agreement as well as a special discounted rate for your event attendees.


PARKING/VALET

Consider all costs, benefits and plans for how your guests, participants and staff will park at the event. If parking is being charged to guests or your offering free valet but being charged per car, negotiate free vouchers to support your on-site staff and volunteers.


FOOD & BEVERAGE

At any hosted event, one of the greatest costs is always food & beverage. Make sure you are aware of requirements at each venue regarding food & beverage as well as the average menu price point. Most venues with in-house catering will have a standard banquet menu document that can give you an idea of the price point. (Although don’t limit yourself to the standard menu, you can always request custom designed menus for your audience and theme.)


If you are bringing in a third-party caterer, and this is permitted, talk with the venue about the logistics to ensure you are aware of additional costs and existing infrastructure. If you are comparing two venues and one has a kitchen on-site and one does not, the cost of building out a temporary kitchen needs to be factored into your evaluation.


Be aware that some venues, namely hotels and large-scale venues, require that all food & beverage go directly through them. This would include any activations and experiential components like candy stations or chocolate truffle favors. Venue rates for these pieces will likely be well above the price you could source from another vendor. Your likelihood of getting an exemption made to bring these items on-site yourself or from another vendor is much greater if this is addressed in the negotiation process, before any contracts are signed.


CORKAGE FEES

If you plan to bring in any outside beverages, you need to clear this with the venue and confirm fees associated with this.


Many venues that allow an event to bring in outside wine will charge a pricey corkage fee per bottle. These fees should be outlined in your proposal and contract so there are no surprises.


GRATUITIES/TAXES

It is standard for venues to include taxes as well as gratuities (especially if food & beverage is part of the agreement) within the scope of the venue agreement. The types and percentages should be clearly outlined so you can quickly compare any variations across venues options.


PREFERRED VENDORS Venues often provide a list of Preferred Vendors that includes the rental companies, audio visual teams, security firms they like to work with.


Make sure to clarify if this is a suggested list of vendors or if this is a required list of vendors you must use. If the latter, and you don’t see your favorite partners on the list, ask what the process is for getting someone not on the list approved and if a waiver of the requirements can be made in your contract.


SET UP & BREAKDOWN TIME

Closely review the hours you have access to the space. You will need time for set-up and tear-down of the space and you want to make sure the hours included in the costs are adequate to accommodate your event. If you address this once contracted, the venue could charge you extra for the additional hours.


DONATIONS

If you are hosting a fundraiser, see if the venue will donate something to your auction or raffle!


WEATHER CONTINGENCIES

For outdoor events, work with your venue(s) to determine an alternative location in case the forecast calls for less than desirable event conditions.


OTHER BOOKINGS

Make sure you are aware of any other events booked to happen on property that overlap with your event but also make sure you are aware of the possibility that another event might book during your timing. While this may or may not be a deal breaker you should consider the effect this would have on guest experience, stress on the loading dock, lines at the bathrooms, etc.


ADDITIONAL FEES

Read your proposals and contracts closely and ask questions for anything that is not clear. Some additional venues are venue specific but should be factored in to your overall comparison such as post-event cleaning, a venue manager fee, required overnight security, etc.



As you can tell, there is a lot to evaluate when looking for a venue for your event, but if you put in a little effort upfront to ensure you are getting the best deal and also are aware of any potential complications, it will save you a lot of stress down the road.


Approach venue selection, knowing that everything is negotiable. Venues Rentals is a business and they should be profitable in their transactions, but there is always room for where they can give a little to help make the event a success. Work with the venue team to find an agreement that is upfront, comprehensive and a win for everyone.


 

ABOUT THE AUTHOR: Jenna Thompson


Jenna is a mountain based Yogi with a love for veggie focused foods. When she's not in Warrior Pose you can find her spending time with her Avalanche Rescue Dog Luna with a Matcha Latte in hand!

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