With budgets under pressure, any L&D manager looking to book a training venue will want good value for money. But venues are likely to play hardball.
Chancellor Alistair Darling’s recent prediction that the economic downturn will be more “profound and long-lasting” than most people fear will not have been lost on learning and development (L&D) professionals, many of whom will be seeing their training budgets under pressure.
In this climate, it may mean managers who use outside venues for training events will find they have less to spend. So what’s the best way to find a venue you can afford? Do you attempt to negotiate a better price, or search around for a cheaper venue?
Of course, with less money around in general it would seem to make sense to surmise that the venues themselves have less business and are therefore open to negotiations. But, according to Duncan Reid, show director for Event UK, an exhibition featuring events venues and service suppliers held last month at the NEC, most venues are “holding up” with most reporting between 70% and 90% capacity rates for the autumn.
He says: “Although many venues are still doing a lot business, that’s not to say people aren’t nervous. What we have seen is people leaving it later to book events, but in most cases when they do book they are still spending the same.
“Venues have always done deals and that will continue. There is a small trend towards companies looking to get better return on investment from a training event – perhaps placing more delegates on a course or cutting down on the number of overnight stays.”
Reid says many UK hotels continue to upgrade their business facilities and he points to the development of new conference centres – such as the ones at London’s Excel Centre and the ACC in Liverpool – as a sign of continued confidence in the market.
Perhaps a clue as to why many UK venues are still doing a healthy business is that Reid has seen fewer British companies holding conferences and meetings on the Continent. This, he says, is down to the weakening value of the pound against the euro. “In the past year, the value of the pound in the euro zone has dropped by 20%,” he adds.
And while venues recognise the credit crunch may be having an effect on buyer’s budgets, no venues said they had lowered their rates accordingly. But then they would wouldn’t they?
At the larger venue chains the typical response is that unless a client is offering significant business, in which case there is always room to negotiate on price, it is rates as usual.
For example, at Principal Hayley,which offers 18 upmarket hotels and conference centres around the country, a spokesman said a reduction in rates would mean a “compromise on quality” and that any deals are dependent on the traditional rules of “supply and demand”.
At Macepark properties, which manages Whittlebury Hall Management Training Centre in Northamptonshire and Scalford Hall Hotel in Leicestershire, the tactic has been to include additional extras in standard delegate packages rather than lower prices. Delegates attending events at Whittlebury Hall in September, for example, will be offered a ‘Morning Blast & Relax Taster’ session – where a personal trainer will lead them in exercises to energise the body and follow this up with a 10-minute shoulder and neck massage.
According to marketing manager Cathy Harrison, while lowering prices may, in the short term, provide a solution to decreasing sales and booking figures, “entering into cost-cutting price wars with competitors will, in fact, have a long-term, damaging effect on the value of a brand.”
“Adding beneficial extras in addition to standard packages will increase the attractiveness of the business and successfully generate new clients,” she adds.
At English Heritage, which offers a number of its properties for training events, head of hospitality Neil Parry acknowledges “the economy isn’t great” and says the organisation is taking steps to makes events more affordable for clients.
Traditionally, clients booking an English Heritage venue pay a standard rate for the property and then negotiate separately with a number of approved caterers. But now, Parry says English Heritage is starting to deal with catering suppliers directly meaning it can offer a reduced-price overall package.
“As we have one sole catering supplier, they are able to lower their rates in return for more business over a year,” he adds.
The first English Heritage venue to offer this approach is 19th century Wrest Hall in Milton Keynes, where the day rate starts at £36.50 including lunch for a minimum of 10 delegates.
And if your training budget won’t stretch to your usual four-star venue in the south-east, it may be time to think outside the box, or travel outside your area.
The Welsh tourism promotional body Visit Wales certainly sees the downturn as an opportunity to trade on its status as an affordable destination.
“With the credit crunch biting hard, Wales offers excellent value for money without having to make any sacrifices on quality,” says Pat Crimp, head of events, in a recent promotion.
And at a time of rising fuel prices, so called eco-venues, which are generally smaller and try to use sustainable energy, may be the answer.
At the Haybergill Centre in Cumbria, where day rates start at £35, owner Mick Hickey says his venue features a number of energy-efficient features, such as all-round recycled cellulose insulation. “This coupled with a small number of staff and vegetables grown on the site mean I can keep overheads down and prices fair,” he says.
And there are plenty of universities offering venues for training events at affordable rates. For example, events organiser at Essex University Gwen Howe says a day rate for delegates starts at £30.50. “We do negotiate with clients depending what they are trying to achieve,” she says.
A handy first port of call if you want to find out more about what universities offer in this area is Venuemasters, which offers a free venue-finding service for companies wanting to arrange an event at an academic venue in the UK.
How to negotiate a better deal with training venues
Rachel Guard, joint managing director at agency Swift Venue Finders, offers some advice on how to negotiate with training venues.
“It’s important to be flexible and realistic. Most venues will give something off their rates simply if the booking fills a gap, and this you will know from the enthusiasm you receive on the other end of the line. The same enthusiasm will not be apparent if your booking does not suit them.
“Venues, like all businesses, have to attain certain occupancy rates to achieve budgets – a fact that many people overlook. The trend has changed in the past few years with meetings, and in particular training courses, now being held on a Tuesday/Wednesday or a Wednesday/Thursday to fit in with lifestyles and business needs.
“This leaves venues in a difficult predicament, as they have another five days to fill. Therefore better discounts can be negotiated by being flexible with dates.
“When dates cannot be changed, being realistic in what you are looking for will give you better buying power. Be prepared to give a little. For example, when running a two-day event, does the venue really need to have a leisure centre? Very few delegates actually get to use it.
“Ask yourself: does the venue need to be four-star, when a good quality three-star venue may be friendlier and offer better value.
“Negotiating better deals with venues is a science in itself. The working of a conference or booking office varies from venue to venue and your success may depend on who answers the telephone and how experienced they are.
“Be prepared to shop around and see who wants and needs your business, thereby creating a win-win situation.”