[Lnc-business] Replaying the Helms-Briscoe debate

[Daniel Wiener]

We went through exactly this same debate two years ago, with Mark Hinkle
wanting to fire Helms-Briscoe and Alicia defending our use of them.  I also
put in my two cents.  So rather than having everyone re-invent the
arguments we had back then, I thought I'd forward the main email thread of
that debate.  If you want to wade through it, I suggest reading it in
chronological order from the bottom up.

Dan Wiener

---------- Forwarded message ----------
From: Daniel Wiener <wiener at alum.mit.edu>
Date: Thu, Nov 29, 2012 at 5:05 PM
Subject: Re: [Lnc-discuss] Time to fire Helms-Briscoe
To: lnc-discuss at hq.lp.org


Mark, since Alicia Mattson was on the Convention Oversight Committee last
year and I wasn't, I asked her for her comments regarding Helms Briscoe.
Here is her response:


*Here is the message I sent to the COC list in response to Mark's 12/30/11
email, and I'll continue with new comments below the mesg.*


*On Mon, Jan 2, 2012 at 4:21 PM, Alicia Mattson <agmattson at gmail.com
<agmattson at gmail.com>> wrote:*
>
> *I think the 2016 site selection process hasn't yet played out enough to
> determine how well Helms Briscoe has worked for us.  We haven't yet let
> them get started negotiating because we haven't done the first round of
> eliminations to give her a shorter list to work with.*
>
> *The LNC voted to select the 2016 site by the end of our term.  To get it
> done, we need to let Sandy's process play out because the COC and staff
> need to focus on 2012.  If in the end, the negotiated rates don't match our
> needs, we don't have to use any of her proposals.  We can walk away.  But
> we don't have time to do it ourselves, so let's give her a chance to finish
> the job.*
>
> *If it doesn't work out, it doesn't, and the next board can start over
> with 2016.*
>
> *Let's do a first-round of cuts and let her go to work.*
> *   -Alicia*


*Convention hotel contracts are like buying a car.  From the start, both
sides know that everything is negotiable.  The car dealer puts sticker
price on the window, but that means nothing.  It's a starting point.  It's
the same with convention hotel scouting.  And in the end, our delegates
will not be paying $126/night at the Rosen Centre.  The story did not end
there.*

*Helms Briscoe started by bringing us 33 properties that they thought could
be negotiated into our price range, or properties that we specifically
requested.  After we did first-round eliminations based on other factors,
we gave Helms Briscoe a short list of our 8 favorites and asked them to
commence further negotiations with that smaller group.  When they brought
us the second round of offers, we then had 5 out of the 8 that were in our
price range and were viable options.  Only 1 of those 5 had put an
original sticker-price offer in our range.  I think it is horribly unfair
to say they didn't bring us what we asked for, when we got several into the
desired room night price range, and in the end we were able to bring 3
proposals to the LNC, each of which were perfectly acceptable and
competitive options within our requested specs.*

*We asked state chairs to let us know if they had a particular city or even
a specific hotel they wanted included for consideration.  Some state chairs
responded, and Helms Briscoe included every specific request we received,
whether or not it fit the COC criteria.  Some state chairs just had no idea
that a hotel they requested was too small for us.  The hotel Mark mentioned
with 255 rooms was in Charleston, SC.  It was specifically requested to be
included by COC member Stewart Flood.  We knew it was too small by itself,
but the offer they gave us was to spread delegates across multiple hotels
in a complex surrounding a convention center.  It is not at all fair to say
that this represented Helms Briscoe offering us something inadequate and
that it demonstrates their incompetence.  We requested it to be included,
and we would have had a sufficient number of rooms when all the neighboring
hotels in the group were combined.*

*The $99 price that the Rosen Centre gave Stewart and Vicki before
we turned the project over to Helms Briscoe was without any context.  It
was a barebones offer without the full detail of how much F&B they would
require, our attrition rates, how much we'd pay for vendor tables, setup
costs, shipping concessions, and all the dozens of other parameters on
the spreadsheet we use to compare convention offers.  It's all about the
whole package, not one single data point.*

*Anyone who says Helms Briscoe offers no value to us is clearly a person
who didn't have to do all the work for the previous two contracts we did
last term for 2012 and 2014.  For each of those projects which we did on
our own, I was the one who did the majority (but certainly not all) of the
work.  Without Helms Briscoe, LNC members spent countless hours of
volunteer time to scour the country for hotels that we could fit in,
solicit bids, track down all the tech specs for the hotels to build those
giant spreadsheets, review historical contracts and usage data for context
on how to negotiate the new contracts, use the hotels as leverage against
each other, and get the contract done with the best offer.  I personally
spent well over 100 hours of time on those projects.*

*By comparison, for the 2016 scouting project I barely had to lift a
finger.  I only had to invest a few hours of time providing specs to HB,
reviewing data, teleconferencing with the COC.  And then I did site visits
at the three finalists.  HB did the rest.  To say that HB offers no added
value is to say that the time they saved me and other COC members was
worthless.  I disagree with that notion.*

*Besides the non-trivial time savings factor, by using Helms Briscoe for
2016, we got other improvements in the package deals.  We got better
concessions from the hotel in areas besides just guest room rates.  Even
while the LNC was in session at the meeting in which we first selected a
2016 site last term, two reps of Helms Briscoe were in the hallway on their
phones still making the hotels fight for our business.  As a result, they
got last-minute improvements in all the offers, things that saved the LNC
money or got us more bang for our buck.  Had we not made the Rosen Centre
compete with the other offers, they would not have been as generous in
other areas.  And if some future problem arises with the 2016 contract,
like maybe our room block doesn't sell all of the guest rooms we committed
to use as has at times happened in the past, Helms Briscoe will come back
in to negotiate the trouble for us so we don't lose our shirts.*

*Then there's the matter of contract terms even after the LNC has decided
to choose a particular hotel.  Every little clause in that contract
represents risk or potential cost for one side or the other.  What are the
penalties/remedies if party to the contract can't do what they agreed to?
Etc.  I have reviewed the terms of the last 5 contracts that we negotiated
on our own without using a professional firm, and it is my opinion that
Helms Briscoe did a better job of that on the 2016 deal than we have done
on our own in the past.*

*If the question is whether to use them for small events like an LNC
meeting, I don't know if it's a large enough package deal for Helms Briscoe
to have a lot of negotiating leverage.  But because of their extensive
database of hotel properties, they can probably find options faster than we
can.  With a convention, we're offering the hotel hundreds of thousands of
dollars worth of revenue, so it's worth their fighting for it.  I don't
know that hotels would fight too hard for 30-ish room nights.  It would
probably be worth a try once just to see how it compares to what Robert
usually can get on his own.  If they only do equally as well as Robert, but
they save Robert a lot of time that he could spend on something else,
that's a benefit.*

*But if the question is whether to use them again for our conventions, I'd
do it in a heartbeat.  They were wonderful to deal with, and we got a
really good result with minimal effort on our part.*


On Wed, Nov 28, 2012 at 7:26 PM, Mark Hinkle <mark at garlic.com> wrote:

>  Dan,
>
> You want proof.  Please see attached spreadsheet from Helms-Briscoe
> entitled LNC 2016 - Finalist hotels.
>
> You'll see very clearly that they (Helms-Briscoe) negotiated the Rosen
> Centre down to $115 per night as compared to the $99 room rate that was
> offered to Vicki Kirkland and Stewart Flood, independent of Helms-Briscoe.
>
> That's after the initial first pass of $126 per night (see spreadsheet
> named Hotel Availability Report, LNC, 2016, vers 1, 10-23-11).
>
> And as you know, our final rate is down to $95 per night plus a host of
> other goodies that made the Rosen Centre, by far, the best financial deal
> for both our members and the LP.
>
> So, first pass by Helms-Briscoe is $126 per night.  Second pass is $115
> per night.
>
> Both of those are higher than the rate offered directly to Vicki Kirkland
> and Stewart Flood @ $99 per night by the Rosen Center folks.
>
> If it weren't for the initiative of Vicki, Stewart, and the Rosen Centre's
> Linda, we likely would be paying far more using Helms-Briscoe, than if we
> had done it ourselves.
>
> So, tell me again, where's the value add in using Helms-Briscoe?
>
> I don't see it.
>
> We already know, thanks to Admiral Colley, that we can contact the
> corporate offices of the major hotel chains and give them our
> specifications.  They'll do the searching for us and without any expense.
>
> Thanks to Alicia Mattson, we now have a spreadsheet that we can use to
> compare/contrast hotels.
>
> We have the expertise in both volunteers and paid staff to do ourselves
> and at a lower cost.
>
> So, again, what's the advantage of paying more for less?
>
> I don't see it.  Time to fire Helms-Briscoe and move on.
>
> Yours in liberty.................Mark Hinkle,
> LNC At-Large & Retired LP Chair
>
> P.S. our specs called for room rates of $139 or less.  So, why even
> include hotels that have run rates of $249-259 per night plus taxes, etc.???
> P.P.S. our specs call for convention floor square footage of 20,000, so
> why include a hotel with 10,500 square foot for their largest room???
> P.P.P.S. our specs call for 350 peak nights sleeping rooms, so why include
> a hotel with only 255 rooms???
>
> "It does not take a majority to prevail, but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men."
>                                             - Samuel Adams
>
> On 11/28/2012 4:56 PM, Daniel Wiener wrote:
>
> Mark,
>
> Although I was not on the Convention Oversight Committee, my recollection
> of the various discussions last year was that Helms Briscoe presented us
> with an initial list of potential hotels that met a variety of requirements
> (size of convention hall, availability for our date range, etc.), but with
> the clear understanding that Helms Briscoe would not be seriously
> negotiating down the room rates until we had first narrowed our selection
> down to some finalists.  At that point they'd be able to squeeze the hotels
> for much better prices.  And that is in fact what happened, as indicated by
> this email from Kevin Knedler:
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> *---------- Forwarded message ---------- From: <kknedler at columbus.rr.com
> <kknedler at columbus.rr.com>> Date: Thu, Feb 2, 2012 at 9:22 AM Subject:
> [Lnc-discuss] 2016 LP convention update To: lnc-discuss at hq.lp.org
> <lnc-discuss at hq.lp.org> It is moving along very nicely. Helms Briscoe
> continues to get better rates and negotiate for us. We are down to 4 sites,
> and soon will be 3 I hope. Top contenders for 2016 will be:   Hyatt of
> downtown Jacksonville, FL   Rosen Plaza of Orlando, FL   Bonaventure of Los
> Angeles, CA   Marriott of Atlanta, GA-- request to remove is on the table
> All are worthy of being finalists. The top three have great walkability
> with other attractions and things to do. The COC will be meeting to clear
> up some more loose ends and pin down the dates. We do plan to present these
> for a vote at the LNC meeting on March 10, per the previous voted-upon
> direction of the LNC. There may likely be presenations by the hotel and CVB
> staff-- much like Columbus meeting in August of 2011. There were naysayers
> that said it couldn't be done. Well, we can indeed do this, just as other
> organizations do. I am proud of the process an work by H.B. and the
> subcommittee of the COC. Thank you. ** KJKnedler*
>
> Now maybe we could have done better all by ourselves, and maybe not.
> Unfortunately we weren't able to run a controlled experiment in an
> alternate universe to definitively answer that question, so all we can do
> is speculate.  Your gut instinct apparently tells you that we'd have been
> better off without Helms Briscoe.  But so far you haven't given me any hard
> data to support your opinion.
>
> I find it quite credible that Helms Briscoe did a competent job of coming
> up with an initial list of hotels, and then did a competent job of
> negotiating a favorable contract (including reasonable room rates) after we
> trimmed down the list.  Given their "volume purchasing" power, I also
> consider it likely that the hotel had to also absorb Helms Briscoe's fee
> without passing it on to us, and that we would not have been able to
> negotiate anything lower on our own even in the absence of that fee.  I
> think that is exactly analogous to the situation in which a home seller has
> to absorb the real estate agent's fee in order to be listed in the MLS and
> attract enough prospects.  The home buyer is not paying that fee and it is
> not passed on to him as a higher price than he could otherwise negotiate.
> Home sellers who try to sell on their own do so in hopes of pocketing that
> fee, not to give the home buyer a discount, and it often backfires on
> them.  It's the real estate market -- supply and demand -- which dictates
> the selling price.  The same logic applies to the hotel industry, if not
> more so, because hotels (like airlines) have a "wasting" inventory which is
> time-sensitive and ceases to exist if not used.
>
> The bottom line is that I believe Helms Briscoe did a good job on our
> behalf and earned whatever fee the hotel gave them.  Yes, we've muddled
> through for 40 years without Helms Briscoe, and sometimes that has worked
> out well and sometimes it has been a disaster.  If we decide in the future
> that we can do it better/cheaper/easier than with Helms Briscoe, I'm fine
> with that.  But I'm still waiting for some evidence to convince me.
>
> Dan Wiener
>
> On Wed, Nov 28, 2012 at 1:14 PM, Mark Hinkle <mark at garlic.com> wrote:
>
>>  Dan,
>>
>> My comments below.
>>
>> "It does not take a majority to prevail, but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men."
>>                                             - Samuel Adams
>>
>>  On 11/28/2012 11:09 AM, Daniel Wiener wrote:
>>
>> Mark,
>>
>> Your numbers below do not accurately reflect the final room rate of $95
>> which Helms Briscoe was able to negotiate for us for the 2016 national
>> convention at the Rosen Centre.  I think that is a very good rate, and
>> evidence of an excellent job by Helms Briscoe which fully justified their
>> commission.  Furthermore, room rates are not the only consideration in
>> obtaining the lowest overall cost for convention attendees.  Parking fees,
>> wifi, meal costs, A/V, etc. all must be factored in.  It's far from clear
>> that we could have done a better job on our own of negotiating a total
>> package at a better price.
>>
>>  I didn't intend my comments to reflect the final deal with the Rosen
>> Centre, but do demonstrate the incompetence of Helms-Briscoe in following
>> our specifications, i.e. room rates under $139 per night.
>>
>> When they sent us 29 hotels, of which only 2 made the cut, that's just
>> incompetence.
>>
>>
>> And just because Helms Briscoe gets paid their commission by the hotel
>> doesn't necessarily mean that it is being passed on to us as a buried
>> charge.  Helms Briscoe handles a huge amount of convention business for
>> hotels throughout the country, and consequently they get the equivalent of
>> a volume discount from those hotels.  Part of that volume discount goes to
>> Helms Briscoe as their fee.  The hotels know that they will lose future
>> business if they don't provide Helms Briscoe with superior rates.  The
>> Libertarian Party, which puts on a moderate-size convention every two years
>> in scattered locations, doesn't have that kind of buying power.
>>
>>  All costs of doing business are passed onto the consumer.  We're the
>> consumer.  Hence the cost of Helms-Briceo is passed onto us in the form of
>> higher prices.
>>
>> If Helms-Briscoe can get volume pricing for it's customers, how come
>> their initial pricing for us was $126 per night versus the $99 per night
>> that was offered to Vicki & Stewart???
>>
>>
>> Nor does it mean that the hotels are losing money by offering better
>> rates to Helms Briscoe.  A hotel that fails to book a convention has empty
>> rooms and empty meeting halls, but most of its overhead remains unchanged.
>> It's just like with airlines, where the planes still have to fly whether
>> they are half full or packed, and it therefore makes sense to discount
>> tickets to fill the plane up since the operating cost of an empty seat
>> versus one with a passenger in it is minimal.
>>
>>  I never mentioned anything about hotels losing money.  That's a red
>> herring.
>>
>>
>> I hear the same argument when people try to buy or sell a home on their
>> own to avoid real estate broker commissions.  Some individuals are
>> successful doing it themselves, but more often they misjudge the hidden
>> costs and the opportunity costs involved (e.g., non-access to the Multiple
>> Listing Service).  Or they screw up the contract details without the
>> assistance of a professional, and end up costing themselves a huge chunk of
>> money.
>>
>>  Again, a red herring.  We're not buying a house here.
>>
>>
>> Now maybe it will make sense for a future convention for us to again do
>> it by ourselves.  Maybe we'll have developed sufficient expertise, and
>> maybe we can find a great deal at a great location, and maybe the
>> opportunity costs (e.g., staff and volunteer time) won't overshadow the
>> purported savings.  But I haven't yet seen any hard numbers which make that
>> case.
>>
>>  Every national LP convention has been put on without Helms-Briscoe's
>> "expertise".
>>
>> Somehow, we've muddled through for 40 years.  I have no doubt we can do
>> so for another 40 years.
>>
>> Regardless of how cost is, or is not, passed along to the convention
>> delegates in higher costs, the service provided by Helms-Briscoe is NOT
>> free.
>>
>> And that was the main point in my email note.
>>
>> I would further note that Vicki Kirkland is probably more responsible for
>> getting the final room night expense down to $95 than Helms-Briscoe.
>> Vicki had several meetings and many phone calls with Linda, our contact at
>> the Rosen Centre to put the deal back on the table after the aborted LA
>> convention deal.
>>
>> I have yet to see any value add for Helms-Briscoe.  Let's fire them and
>> move on.
>>
>> Yours in liberty.....................Mark Hinkle,
>>
>> LNC At-Large & Retired LP Chair
>>
>>
>> Daniel Wiener
>>
>> On Tue, Nov 27, 2012 at 9:30 PM, Mark Hinkle <mark at garlic.com> wrote:
>>
>>>  Dear LNC,
>>>
>>> I recommend we fire Helms Briscoe.
>>>
>>> Their services are anything but free.
>>>
>>> Here's a copy of an email note I sent to Kevin Knedler while I was LP
>>> Chair referencing a spreadsheet we received from Helms Briscoe supposedly
>>> responding to our stated specifications:
>>>
>>> On Fri, Dec 30, 2011 at 4:02 AM, Mark Hinkle <mark at garlic.com> wrote:
>>> Kevin,
>>>
>>> I see Robert Kraus has already responded, but I must say, of the 29
>>> properties listed in the spreadsheet she sent, only 2 met our requirements
>>> of $139 (or was it $129?) or less per night for guess rooms.
>>>
>>> And since the Rosen Center directly offered us a $99 room night (for
>>> 2014/2016?) versus $126 via Helms Brisco, it sure looks like we're getting
>>> screwed here.
>>>
>>> I thought the idea was to getting better rates via Helms Brisco, not
>>> worse rates.
>>>
>>> I'd say let's give them one more shot.  But, if they don't perform this
>>> time, I'll recommend terminating our contract with them.
>>>
>>> FYI....................Mark Hinkle, LNC Chair
>>>
>>>
>>> Helms Briscoe gets a $126 per night room rate versus the $99 rate that
>>> Vicki Kirkand and Stewart Flood were offered directly from the Rosen Center.
>>>
>>> That's a $27 premium to use Helms Briscoe.  That's NOT my definition of
>>> "free".  Not by a long shot.
>>>
>>> Helms Briscoe gets paid a commission by the hotel.
>>>
>>> Where do you suppose the hotel gets the money to pay for that commission?
>>>
>>> Bonus prize if you said: "you and me"!!!
>>>
>>> TANSTAAFL
>>>
>>> Helms Briscoe gets paid handsomely for their efforts and every penny of
>>> those costs are passed onto the consumer (you and me) in the  form of
>>> higher room night costs, higher food and beverage costs, etc.
>>>
>>> FYI..................Mark Hinkle,
>>> LNC At-Large & Retired LP Chair
>>>
>>> P.S. We can do far better on our own with the help of Robert Kraus,
>>> Admiral Colley, Ruth Bennett and Nancy Neale.
>>>
>>>
>>> "It does not take a majority to prevail, but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men."
>>>                                             - Samuel Adams
>>>
>>>
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