Hotel Preferred Supplier Agreements: What They Mean for Event Planners
A hotel preferred supplier agreement grants an external company (AV, catering, florals, photography) exclusivity or preferred status within the hotel. For event planners, this means you may be required or pressured to use the hotel's preferred supplier rather than your own. Always ask about preferred supplier exclusivity in your RFP and negotiate the right to use external suppliers before signing the contract.
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What Preferred Supplier Agreements Cover
AV and production: the most common exclusivity arrangement. Some hotels require in-house AV for all events in the building. Others charge an exclusivity fee (10–25% of external AV spend) for using outside suppliers. Catering: most hotels require in-house catering for all events. Some allow external caterers for themed events with a buyout fee (€2,000–€10,000). Florals and decoration: rarely exclusive, but preferred suppliers often receive referrals and commission. Photography and videography: occasionally on preferred lists but rarely exclusive.
How to Identify Exclusivity Clauses in Your Contract
Look for: 'In-house supplier required for all technical services.' 'External supplier subject to a house technician fee of [X%].' 'Catering provided exclusively by [Hotel Name].' 'External catering permitted subject to a kitchen buyout fee.' Ask directly: 'Are there any services where we are required or financially incentivised to use the hotel's preferred supplier?'
Negotiating Around Exclusivity
AV exclusivity: negotiate removal of the exclusivity fee before signing. If the hotel won't remove it, cap it at 10% and define 'AV spend' precisely (equipment and crew only, not planning time). Catering: buyout fees for external catering are rarely removed but can be reduced, especially for longer-term relationships. For events where F&B is the primary spend (gala dinner, awards night), the DDR reduction from using in-house catering often outweighs the quality difference.
When Preferred Suppliers Are Actually the Right Choice
In-house AV: for basic DDR AV (projector, screen, mic) the in-house team is convenient and the quality difference is minimal. Using them avoids exclusivity fees and reduces coordination complexity. In-house catering: most hotel chefs are excellent — using in-house F&B is often the right choice, not a compromise. The premium is mainly on specialist AV and production, not food and beverage.
Frequently Asked Questions
What is an AV exclusivity fee at a hotel?
An AV exclusivity fee (also called a technical services fee or house tech fee) is charged by hotels when you use an external AV company. It typically ranges from 10–25% of external AV spend and represents the hotel's compensation to its in-house AV partner for lost business.
Can I use my own caterer at a hotel venue?
Most hotels require in-house catering for events held in their facilities. Some permit external caterers for themed events (BBQ, food trucks, ethnic cuisine outside the hotel's offering) in exchange for a kitchen buyout fee of €2,000–€10,000. Always ask before assuming.
Do I have to use the hotel's AV company?
Not always. Many hotels have preferred AV suppliers but allow external companies for an exclusivity fee. Some have full AV exclusivity. Check the contract clause and negotiate before signing — this is significantly easier to resolve pre-signature than post-signature.
What is a kitchen buyout fee at a hotel?
A kitchen buyout fee is charged by hotels that allow external catering companies to use their kitchen facilities. It compensates the hotel for lost F&B revenue and facility use. Typical range: €2,000–€10,000 depending on hotel category and event size.
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