Understand the Situation
Step number 1 is typically the hardest for anyone just getting comfortable with negotiating. While traveling, you have to be able to recognize a situation where a negotiation is possible, and even expected and welcomed in some cultures.
The easiest way to know when you are able to negotiate is when the other side has screwed up. Let’s say you booked a hotel for a trip to Spain, and when you get there the room isn’t ready when they promised. Or perhaps you booked a Queen bed but all they have available now is a room with 2 twin beds. Perfect, now we have a situation you can work with.
Now that you know you’re in negotiation territory, do you just march up to the front desk and start making demands? No! Even though that’s what some people most certainly do. You have to stop for a minute and consider all of the circumstances, the most important of which is each side’s back-up plans.
Know and Improve YOUR Back-up Plan
This is HUGE, as your back-up plan is your single greatest source of power in a negotiation. This is also the biggest reason that you can’t just march up and start making demands whenever you feel wronged. What are you going to do if they say ‘no’? Walk back to your room with your tail between your legs? Not if you follow along!
Take a seat, crack open your computer, and spend 20 minutes considering what your back-up plan is. These 20 minutes will pay off in Spades more times than not.
If you’re negotiating with a hotel, is their other hotels in the area that are available? If it is Oktoberfest in Munich, then the answer is probably no, so you had better check!
If you’re negotiating with a restaurant, are there other restaurants in the area you could go to? Could your back-up plan be to just have a drink and hang out for an hour or two? Most restaurants should want their patrons spending as much as possible, so keep that in mind!
Know and Diminish THEIR Back-up Plan
If YOUR back-up plan is YOUR largest source of power, then it certainly follows that THEIR back-up plan is THEIR largest source of power in the negotiation. So, you have to spend some time considering what the other side’s back-up plan is, and think about anything you could do to improve your standing.
For instance, if in the negotiation you plan on threatening that you’ll go to another hotel, better make sure there is not a line of people waiting to take your place! Or if an online review is a key bargaining chip, make sure that the hotel you’re at actually cares about their online reputation, otherwise the review will not be important to them.
Once you understand their back-up plan, you may be able to do some things to improve your standing. For instance, if there is a line to get in, you could wait until the line dies down before starting the negotiation. Or the later you wait, the lower likelihood that a hotel will get someone who can take your place in the room (also, the lower likelihood that you’ll find somewhere else to stay, so this might be risky!).
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Essentially, anything you can do to put yourself in the other side’s shoes is going to improve your skills as a negotiator.
Negotiable Issues on the Table
So often when people are negotiating, they focus on one thing: money. Of course, money is important, and it is easily quantifiable, so it is very simple to understand the benefit you are getting as a result of the negotiation.
You got $40 off the bill? Great! Is that better than a free night and 2 free breakfast coupons? Maybe, maybe not. That is for you to decide, but if you don’t think about it, your mind will subconsciously feel that the money is the better choice, and might lead to a worse outcome for yourself.
Take some time and write down every single issue that could be negotiated. For a hotel negotiation, here is the list we typically use:
- Reviews on Booking Sites (TripAdvisor, Hotels.com, Expedia, etc)
- Coupons to Area Restaurants (Many hotels often have a ton of these they’ll give you!)
- Shuttle to Airport and/or City Center and/or Park Entrance
- Future Stays at that Hotel or Chain
- Check-Out Time
- Room Size
- Room Location (We love a good view!)
- Bed Size
- Cost of the Room
The more issues you have on the table, the better. Notice how we put the cost of the room at the end. That was intentional. So often people focus on cost alone, which hurts them in the negotiation.
What’s more, the manager so often has to negotiate on cost alone, that they will find it refreshing that you will be open to taking something other than a cost reduction! That will usually lead to you getting more out of the negotiation than you would if you just demanded a few bucks off.
Also, notice how reviews was the TOP item on the list. In your negotiation, you’ll get so much further if you are able to bring something to the table to help out the hotel! Always highlight this in the discussion, always alluding to the fact that your review could be positive OR negative.
Here’s how we typically start the conversation (hypothetically, in this situation we are in a room with 2 double beds and no view, when we ordered a Queen bed with a garden view):
“Hi, we are Zach and Julie in room 202, we love the stay so far, unfortunately as you can see here *shows receipt* we ordered a Queen bed with the garden view. We know that you would have given us the room if it was available, and we really do love this hotel, there’s a reason we booked it I mean just look around *gestures to the lobby*. It is beautiful! We would love to leave a fantastic review on TripAdvisor, and come back to stay again. For our trouble on the room, we’d love to try out your breakfast, which we would also include in the review, and if you could give us a free shuttle to the park entrance today and the airport after check-out, we know we’d have a lovely stay.
We personally don’t care too much about the quality of our room, since we try to spend all of our time exploring and adventuring, so we usually ask for excursion-related things! If you are all about room quality, then feel free to shamelessly steal what we have and make it your own!
Side note: When you’re checking in, if the room is perfect and just as planned, you can even offer to downgrade yourself to a different room in exchange for some amenities like breakfast, shuttles, coupons, free drinks, etc. There is almost ALWAYS room for negotiation if you look for it!
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Framing the Conversation
Zach recently read a book by Michael Lewis called The Undoing Project that totally flipped his world upside down when it came to the concept of framing.
Here is a real experiment that was done with real people and real results that they talk about in The Undoing Project:
Decision (i). Choose between:
- A sure gain of $240 [84 percent]
- 25% chance to gain $1000, and 75% chance to gain nothing [16 percent]
Decision (ii). Choose between:
- A sure loss of $750 [13 percent]
- 75% chance to lose $1000, and 25% chance to lose nothing [87 percent]
Think about that. These our basically the same situation, framed differently. Do you choose the sure thing or do you roll-the-dice? When things are framed as a gain (winning money) then people avoid risk. When things are framed as a loss (losing money) then people take risks.
Your head can kinda hurt after thinking this through, but here is the long and short of it: people are risk-averse when things are framed as a gain and risk-seeking when things are framed as a loss. But what does this mean to you?
Essentially, if you are trying to get someone to roll-the-dice and take a chance on you, frame the situation as a loss (“We come to Europe all the time and love your hotels, I know you don’t want to lose our business on this trip and in the future and end up with a negative review…“). If you want someone to avoid risk, then frame it as a gain (“We come to Europe all the time and love your hotels, I know you want a great review and to win our business on this trip and in the future…).
These are basically the same sentence, but you’ll get VERY different results using each one. And THAT is the power of framing!
Offer FIRST and Aim HIGH!
This one might fly in the face of old-school negotiating tactics, but offering first is a CRUCIAL way to make sure you win the negotiation. Picture this situation:
You are negotiating with a hotel manager on the price of your room after you were kept up all night with construction next door.
Scenario 1: You ask the manager “We were kept up all night, what can you do for me?” The manager says he can give you $20 off, to which you complain that $20 is not enough. You end up getting them to give you $40 and breakfast, which you consider a HUGE win given what it started at!
Scenario 2: You tell the manager “We were kept up all night, we need a free night now, 2 free nights in the future, 2 free breakfasts, and a shuttle to the airport.” A lot right? Perfect. The manager says there is no way he can do all that, but he can work with you. You end up conceding a lot of what you initially asked for, but get a free night, a coupon code for the future, free breakfast, and shuttle to the airport. Much better than the $40 in Scenario 1, and the manager feels like they won because they got you down from such a high starting point!
Making the first offer allows you to set the limits of the negotiation, and as a result you will always end up with a better result. Even better, it feels as if the other side ‘wins’ the negotiation, because they were able to talk you down from your starting point, and you still come away happy.
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This situation also highlights another principle: aim high. I’m talking ridiculously high, people. Snoop Dogg on a mission, high.
Now, you are probably going to feel a bit uncomfortable when you are asking for a lot, I know we sure did at first. But, the fact that you are starting with such a high asking price will mean that you have room to concede, and still end up with a very good deal.
For instance, asking for all of your money back, when you are okay receiving 50% back. If you start by only asking for 50%, then the other side will try and talk you down to 25%, and no matter what one of you will end up feeling you’ve lost.
Flexibility is the number one trait you should portray in your negotiation. Being open to as many options as possible shows that you are willing to work with the other party, and gives you positive good will in the negotiation.
Showing flexibility also improves your ability to aim high with your initial offer. You’ll be able to show that you are willing to do what is easy for them, and want to find a solution that works for everyone involved.
If possible, you can even offer two separate options (“We would take 2 free nights and breakfast, or a free excursion”). That way, you know that whichever option the other person leans towards is easier from their perspective. If you don’t give options and display flexibility, you might end up with a deal that is worse than you could have gotten if you showed some flexibility up front.
‘Scoring’ the Negotiation
We certainly saved the best for last, people. This last secret is perhaps the most important of all. You need to know how you are ‘scoring’ your negotiation, and you need to determine this before you enter into the discussion. What do I mean by this?
Remember before when we made a list of all of the negotiable issues? We are going to use that now, and we are going to weight each issue in terms of how much money we think each item is worth. Here is a typical scoring of a hotel negotiation we use:
- Reviews on Booking Sites [Score: $0]
- Coupons to Area Restaurants [Score: $15 per meal]
- Shuttle to Airport and/or City Center and/or Park Entrance [Score: $20 per ride]
- Future Stays at that Hotel or Chain [Score: $75 per night]
- Check-Out Time [Score: $5]
- Room Size [Score: $10]
- Room Location [Score: $20]
- Bed Size [Score: $20]
- Breakfast [Score: $10 per meal]
- Cost of the Room [Score: $1 per $1 saved]
Okay, now why do you need to make a scoring system for the negotiation? Because if you don’t, you won’t have a great way of measuring the outcome!
Without a scoring system, which would you do: 2 breakfasts, 2 free meal coupons, one future night free, a shuttle ride, and a king bed, OR $100 off your bill? If you don’t have a scoring system, I GUARANTEE you’ll take the $100. However if you value all of those items, you’ll see they are worth $165, so you should take the package!
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Now Get Out There and Practice!
As with everything, you are going to suck at negotiating at first. We absolutely did. But if you put your mind to it, get out and practice, then you’ll get better and better. Soon you’ll be negotiating with the best of them, saving money and making your trips even more epic than they already are!
If you need some motivation to get out there and practice, here you go:
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