With a surge of pent-up demand and the need for hotels and other venues to bring in revenue, hidden fees are finding their way onto many meeting ledgers and planners are furious.
In an effort to get out of the financial hole many companies find themselves in since the pandemic, some are charging ancillary fees that make event planners furious. Asking upfront doesn’t always guarantee that there will be no surprises, but the proper knowledge and verbiage, some are getting them lifted.
Resort Fees and Fee Creep
Nothing produces a reaction of “don’t get me started” more than a mention of resort fees. “Depending on where you go, you could be paying destination fees or resort fees or a million other made-up fees,” said Kristen McDonough, CMP, executive vice president of conferences for the Association of National Advertisers (ANA). While many of these can be negotiated down, it is hard to negotiate them out completely.
Besides hidden fees, there is a prevalence of what McDonough calls fee-creep. “A good example of fee creep is when you are used to paying for something like seu90rvice fees which were standard at 20 percent years ago, and now I have seen them as high as 28 percent.”
“Internet can be free in one venue, $3,000 in another, and $15,000 in yet another, all for the same exact thing,” McDonough said. “We do work to negotiate this upfront. However, it makes it extremely difficult to plan and budget for as in many cases they will not commit to a flat rate, but will give you X discount on the total.”
Tyrha M. Lindsey-Warren, managing director, L.A.I. Communications, a multicultural event planning firm, confirmed this trend. “We are seeing a great deal of fees and surcharges passed on. They include additional labor fees, AV fees for things like internet and streaming and surcharges, extra taxes from hotels, and the list continues to grow as companies try to recoup losses from the pandemic,” she said.
An eagle eye helps when looking over bills. “Non-profits have historically been watching their hard-earned dollars, but now it’s more important than ever to be extra watchful of the bottom line,” said Genny Hom-Franzen, executive director, Asian American Advertising Federation which organizes several Asian marketing and advertising industry events each year.
Besides internet and the universally loathed resort fees, planners also protest credit card processing fees, porterage, a historic preservation fund, fees for holding an event outside, and even electricity.
“Porterage is another one to watch out for as they like to sneak it into the contract and could be pricey for someone to carry your bags to your room which I would assume most people don’t use on short business trips,” McDonough said.
Some planners are more sanguine and take every curve ball in stride. Dawn Reeves, vice president club services, membership and programs, American Advertising Federation (AAF), says it’s all in the details. “In addition to audiovisual costs, our hotel this year sent us a separate bill for electricity usage as it related to audiovisual equipment,” she reports.
Historic Preservation Fund
“One of the most recent frustrating ones was from a hotel in San Diego called the Historic Preservation Fund or HPF charge — $15 per room per night.” She quoted the description, “The purpose of this charge is to support the ongoing preservation of this 1888 National Historic Landmark and to protect its legacy for generations to come.”
Holding an Event Outside
“Another big one was the up-charge or additional charge for holding an event outside — they can charge a few thousand dollars for that,” McDonough said.
What can you do?
As a result of hidden fees and rising costs, planners are taking any and all of these measures: passing along fees to attendees, going virtual, canceling their event altogether, throwing their hands up in the air, biting the bullet, and adopting a “what are you going to do” attitude.
This September, The Toy Association will produce its first in-person event since February 2020 with its Preview & Holiday Market at the Dallas Market Center. “While certain elements of our work are more expensive now, I would attribute the increases to the normal course of business, plus a little extra,” said Kimberly Carcone, executive vice president, global market events, The Toy Association.
“For us, the only significant increase was the cost of food due to supply and demand. But, as is the case with all smart contracts, there was a provision that notes such influences can affect final pricing,” AAF’s Reeves said.
“We had been hosting the multicultural media forum, recently rebranded as the cultural insights forum, since 2001. But, we have not planned an in-person event since 2018, even before Covid. The main reason we stopped was due to rising costs even back then,” said Adriana Waterston, chief revenue officer, insights & strategy lead, Horowitz Research.
Getting outrageous fees lifted is not easy. “To date, we at L.A.I. Communications have not been able to get anything waived. Even customer loyalty or giving your repeat business seems to not matter nowadays in our experience,” Lindsey-Warren said. “We see it as a form of gouging. However, you have no choice but to pay the fees if you want to get your event produced.”
ConferenceDirect helps ANA negotiate its hotel contracts, and McDonough has learned these master negotiating tactics. In its first round of back and forth with the contract, ANA outlines the most significant concessions that it wants in its contracts. That typically includes:
- X internet for Y cost. ANA asks for a specific amount of bandwidth for a specific cost and negotiates from there.
- No resort fees. This stipulation either gets them completely erased or brings them down to something like $5 per room.
- Staff room rates at a discount
- A certain number of suites
- Waive production fees for outside AV vendor
- Box handling charges waived for X number of packages
- X amenities to send to attendees
- Early check-in/late checkout
- Suite upgrades
A negotiating tactic McDonough has found helpful is to add some things that aren’t of the utmost importance so she can give those up in lieu of things she really wants.
Is there an opportunity for all of these hidden fees to be offset by additional sponsorship categories? Absolutely. Electricity sponsor anyone?