Identify the interests of each party prior to the negotiation.

GBL X Q seneca b Courses Bb *Mic X Launch N Bb Mock Int Bb 3407444 (247) Mo |0 Spinbot Q starbucks Starbuck Login Starbuck Microsof Microsof + X C https://learn-us-east-1-prod-fleet02-xythos.content.blackboardcdn.com/5c082fb7a0cdb/37528104?X-Blackboard-Expiration=1669582800000&X-Blackboard... Q to G 3 of 9 Q + Q D Page view A Read aloud T) Add text | Draw Highlight Erase | & | SAGE SAGE Business Cases 2018 International Council on Hotel, Restaurant, and Institutional Education (ICHRIE). All rights reserved. 2018 International Council on Hotel, Restaurant, and Institutional Education (ICHRIE). All rights reserved. OSAGE businesscases This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes. 2021 SAGE Publications Ltd. All Rights Reserved. The Art of Negotiation: A Hospitality Industry Case The case studies on SAGE Business Cases are designed and optimized for online learning. Please refer to the online version of this case to fully experience any video, data embeds, spreadsheets, slides, or other Study resources that may be included. Case This content may only be distributed for use within Seneca College. http://dx.doi.org/10.4135/9781529719529 + Author: Priyanko Guchait & JeAnna Abbott Online Pub Date: January 15, 2020 | Original Pub. Date: 2018 Subject: Negotiation Level: | Type: Indirect case | Length: 2377 Copyright: @ 2018 International Council on Hotel, Restaurant, and Institutional Education (ICHRIE). All rights reserved. Organization: Parents Against Drunk Driving] El Camino Real Lodge and Golf Resort | Organization size: Large Region: Northern America | State: Industry: Accommodation and food service activities| Social work activities without accommodation| Sports activities and amusement and recreation activities Originally Published in: Guchait, P. , & Abbott, J. L. ( 2018). The art of negotiation: A hospitality industry case study. Journal of Hospitality & Tourism Cases, 6( 3), 31-36. Publisher: International CHRIE DOI: http:/dx.doi.org/10.4135/9781529719529 | Online ISBN: 9781529719529 ED 6.C ENG 1:03 PM Cloudy O US 2022-11-27 32GBL X Q seneca b Courses Bb *Mic X Launch N Bb Mock Int Bb 3407444 (247) Mo |06 Spinbot Q starbucks Starbuck Login Starbuck Microsof Microsof + X C https://learn-us-east-1-prod-fleet02-xythos.content.blackboardcdn.com/5c082fb7a0cdb/37528104?X-Blackboard-Expiration=1669582800000&X-Blackboard... G 5 of 9 Q + Q Page view A Read aloud T Add text Draw v Highlight Erase SAGE SAGE Business Cases SAGE SAGE Business Cases @ 2018 International Council on Hotel, Restaurant, and Institutional 2018 International Council on Hotel, Restaurant, and Institutional Education (ICHRIE). All rights reserved. Education (ICHRIE). All rights reserved. strategy is to maximize substantive gains in an adversarial contest without caring about the needs of the other party (Anderson, 1992). The extreme forms of distributive bargaining employ strategies that involve Abstract ridicule, attacking, or threatening adversaries and making excessive demands (Perdue and Summers, 1991). Distributive negotiators concede slowly, minimize benefits of others' concessions, exaggerate the value of concessions, conceal information, and argue forcefully to reach favorable settlements (Anderson, Negotiation is an art and skill that hospitality professionals need to master. Hospitality 1992; Fisher and Ury, 2011). companies, managers, and employees frequently need to handle conflicts and negotiate effectively with various parties including customers, clients, suppliers, and employees. Using an Best Alternative to a Negotiated Agreement (BATNA) example of a two-party negotiation between an Association and Hotel, this case study provides an opportunity for hospitality students and professionals to practice negotiation skills. This case The best alternative to a negotiated agreement (BATNA) can be defined as the proposed action a party would study encourages critical thinking about handling conflicts and disagreements with other parties. take if the proposed deal was not an option (Fisher and Ury, 2011). In other words, it is the minimal acceptable The goal of this case study is that the audience learn various negotiating techniques and also level of agreement to the negotiating party. BATNAs may include walking away, prolonging a stalemate, decide which technique to use under what situation. stalling, approaching another potential buyer, etc. (Sebenius, 2001). Thus, BATNAs are about creating alternatives. Learning how to develop effective BATNAs is a skill that can be taught (Fisher & Ury, 2011). It is also important that negotiators develop their BATNA in advance of the negotiation. This gives the negotiator Case leverage in the negotiation. The ability to create alternatives and potentially strengthen a weak BATNA is one Introduction of the most important skills a negotiator can learn. Power comes from these alternatives. Learning to develop alternatives and define a BATNA in advance lays the foundation for increasing negotiating strength, which O Negotiation in the Hospitality Industry presents the potential for greater control, influence, and authority (Convenience Store Decisions, 2014). A negotiator should never accept a deal unless it is better than their BATNA (Fisher & Ury, 2011). Few personal and professional skills are as important as negotiations, and yet fewer still are as seemingly challenging. Most individuals feel uneasy about negotiating, yet know it is crucial. Negotiations pervade every This two-party negotiation between an Association and Hotel case study provides an opportunity for + aspect of life today. Negotiations with friends, family, car dealers, clients, employees and a whole host of hospitality students and professionals to practice negotiation skills. The teaching note emphasizes the people you come across in your daily activities (Firth, 2014). It is a myth that good negotiators are born. Good importance of identifying each party's interests, creating alternatives and options, understanding the concept negotiators constantly seek opportunities to negotiate and receive feedback on their negotiations. Thus, good of the best alternative to a negotiated agreement (BATNA), as well as commitment. negotiators practice their interpersonal and communication skills. More importantly, it is a skill that can be mastered with practice and feedback. Scenario Negotiation is an art and skill that hospitality professionals need to master. The success of hospitality Parents Against Drunk Driving ("PADD") and El Camino Lodge and Golf Resort Hotel businesses is not only based on profitability but also development and maintenance of long term relationships General Information for Both Parties with all stakeholders (Tamayo, 2011). Hospitality companies, managers, and employees frequently need to handle conflicts and negotiate effectively with various parties including customers, clients, suppliers, and Strategic Meeting Planners, Inc. ("SMP") is a meeting management company that plans, organizes, and employees (Mahmoud, 2015). Negotiation training is beneficial for all employees, not just management. For manages meetings, conferences, and conventions throughout the United States and other parts of the world example, negotiation training can help frontline employees handle customer complaints more effectively. for its clients. SMP offers its clients a full array of meeting-management services, including strategic planning Negotiation training can also help with internal customer relationships (decrease in workplace conflict). Good and budgeting; site selection; contract negotiations with hotels and other vendors; marketing; accounting negotiators are promoted faster (Fiona, 2008) and have stronger workplace relationships skills (Clenney and other financial services; managing revenues and disbursements; managing the registration process; et al., 2010). There is a need for hospitality professionals not only to learn various negotiating techniques and managing the respective event onsite. SMP's clients range from Fortune 100 companies to non-profit but also to decide which technique to use under what situation. Hospitality companies which can perform organizations, such as the American Kidney Association and the International Society of Toxic Tort Defense effective negotiations to handle conflicts and disagreements with other parties (customers, suppliers) can gain Counsel. a competitive advantage over competitors. One of SMP's clients is Parents Against Drunk Driving ("PADD"), a non-profit organization with over 20,000 Negotiation Strategies members comprised primarily of victims of drunk-driving incidents and their families and friends. PADD's primary mission is to reduce the number of drunk-driving incidents by (1) raising awareness of the dangers Negotiation strategies are interaction patterns used by parties in conflict to achieve resolution (Ganesan, of drinking and driving through education and public service announcements and (2) lobbying for legislation 1993). Negotiation is a process by which joint decision is made by two or more parties (Pruitt, 2013). that would (a) provide harsher penalties for drunk-driving offenders and (b) increase the fines and potential Generally negotiators tend to pursue the two basic negotiating strategies: integrative and distributive (Beenen civil liability for establishments that sell or serve alcoholic beverages to minors or persons who are obviously and Barbuto, 2014). The objective of integrative bargaining (also known as "symbiosis" or "problem solving" or intoxicated. PADD also provides a support network for those who have been victimized by drunk-driving "win-win negotiation") negotiation strategy is to create value by means of the negotiation (bargaining process). incidents. Using an integrative negotiation strategy, parties tend to reach mutual agreements by being collaborative, inventive, and persistent in searching for substantial joint (financial) gains (Beenen and Barbuto, 2014). Three years ago, PADD decided to hold its Annual Conference (the "Conference") on three days of this An integrative negotiation strategy is used to develop and maintain long-term relationships between parties year (the "Conference Dates") [on a Wednesday, Thursday, and Friday one week before this negotiation], (Fisher and Ury, 2011). Integrative negotiators stress the importance of open communication and information at the El Camino Lodge and Golf Resort Hotel (the "Hotel") in Palmtreal. PADD estimated that at least 700 sharing. people (excluding their spouses or any other traveling companions) would attend the Conference. After some negotiations, PADD, through the efforts of its agent, SMP, entered into a contract with the Hotel (the "Hotel The objective of the distributive (extreme forms of distributive negotiations are also known as "aggressive Contract") providing in pertinent part: bargaining" or "hard distributive bargaining" or "hard-line approach" or "win-lose negotiation") negotiation Page 3 of 7 The Art of Negotiation: A Hospitality Industry Case Study Page 4 of 7 The Art of Negotiation: A Hospitality Industry Case Study SSAGE businesscases SSAGE businesscases 6.C P ENG 1:03 PM 32 Cloudy O US 2022-11-27GBL X Q seneca b Courses Bb *Mic X Launch N Bb Mock Int Bb 3407444 (247) Mo| 06 Spinbot Q starbucks Starbuck |Login Starbuck Microsof Microsof + X -> C https://learn-us-east-1-prod-fleet02-xythos.content.blackboardcdn.com/5c082fb7a0cdb/37528104?X-Blackboard-Expiration=1669582800000&X-Blackboard... Q to G 7 of 9 Q + 2 Page view A Read aloud T Add text Draw Highlight Erase SAGE SAGE Business Cases SAGE SAGE Business Cases @ 2018 International Council on Hotel, Restaurant, and Institutional 2018 International Council on Hotel, Restaurant, and Institutional Education (ICHRIE). All rights reserved. Education (ICHRIE). All rights reserved. . Guest Room Commitment: The Hotel agrees that it will provide, and PADD agrees that it will be attendance responsible for using, 2100 single room nights as follows: . Wednesday 700 Afterwards, Mr. Napier retreated to the Hotel lounge to "catch-up" with two players from Manisota's Thursday 700 championship team who now reside in the Palmtreal area, Jimmy Beam and Tommie Collins. According to . Friday 700 witnesses, Mr. Napier and his friends drank tequila shots with beer "chasers" until closing. At one point, after . Total Room Nights: 2100 Mr. Napier stumbled into a cocktail waitress and caused her to drop her drink tray for a second time, the . PADD's Room Rates: Based on PADD's total program requirements, the Hotel confirms the following manager had to ask Mr. Napier if he would kindly refrain from wearing his table's decorative centerpiece as a room rates for PADD's attendees ("PADD Rates"), excluding taxes: helmet and re-enacting his famous "bootleg" touchdown run from the championship game. . Single: $175.00 Double: $175.00 The next morning, PADD members were shocked to read the headline on the front page of their . Additional Person: $20.00 complimentary copy of the Palmtreal Tribune provided by the Hotel: "Football Star Arrested for Drunk Driving . Junior Suites: $250.00 After Delivering Keynote Speech for PADD." According to the article, Mr. Napier had been arrested for . Master Suites: $300.00 suspicion of "driving while intoxicated" at 2:30 a.m. as he was turning from the Hotel's parking garage onto . All room rates are subject to applicable state and local taxes (currently 15%) in effect at the the city's main thoroughfare, and a subsequent breathalyzer test indicated that his blood alcohol content was time of check-in. more than three times the legal limit allowed under the applicable state/provincial law. Commission: The Hotel agrees to pay PADD's agent, SMP, a commission of ten percent (10%) on all used room nights. Outraged, 250 of the attendees staying at the Hotel immediately packed up their belongings and checked . Complimentary Rooms: PADD will be entitled to one (1) complimentary room night for every fifty (50) out of the Hotel, refusing to pay for the next two nights of the Conference. Disgruntled attendees also began revenue-generating room nights occupied. If Junior or Master Suites are occupied, they will be rated calling the Conference's phone line, which was being monitored by SMP, demanding that their registration on a daily basis as three (3) units per night and four (4) units per night, respectively. fees be refunded and threatening to cancel their memberships in PADD. The registration averaged $250 Cutoff Date: Reservations by attendees must be received on before one month before the first day per registrant, which included a ticket to the opening dinner. Additional tickets for the opening dinner sold of the conference ("Cutoff Date"). On the Cutoff Date, the Hotel will review the reservation pickup separately at the door for $50. PADD's annual membership dues are $200. + for the Conference, release the unreserved rooms for general sale, and determine whether it can accept reservations based on a space-and-rate-available basis at PADD Rates after this date. The On the Monday following the close of the erence, SMP received a facsimile from the Hotel advising that release of rooms for general sale following the Cutoff Date does not affect PADD's obligation under PADD had failed to meet its room commitment of 2100 room nights under the Hotel Contract by 500 room this Contract to use guest rooms. nights, and since the 1600 room nights actually used was less than eighty-five percent (85%) (1785 room Rooms Attrition: The Hotel is relying on PADD's use of 2100 Total Room Nights. PADD agrees that nights) of the Total Room Nights for which PADD was obligated, the Hotel was entitled to recover liquidated a loss will be incurred by the Hotel if there is a total reduction greater than fifteen percent (15%) in damages in the sum of $32,375 (1785 room nights minus 1600 room nights = 185 room nights times the $175 Total Room Nights actually used. PADD Rate) under the Hotel Contract's attrition clause. With PADD's consent, SMP forwarded this letter to its outside counsel, who will represent PADD in this matter. Lawyers representing PADD and the Hotel have If the room nights actually used by PADD are less than eighty-five percent (85%) of the Total Room Nights, contacted each other, and they have agreed to meet in Palmtreal as soon as possible to try to resolve this PADD agrees to pay, as liquidated damages and not as a penalty, the difference between eighty-five percent matter. (85%) of the Total Room Nights and PADD's actual usage of rooms, multiplied by the average PADD Rates for single/double rooms. Under the applicable state/provincial law, a provision in a contract liquidating the damages for the breach of the contract is valid unless the party seeking to invalidate the provision establishes that the provision was At PADD's request, SMP also contacted the Shooting Star Talent Agency (the "Talent Agency") to see if unreasonable under the circumstances existing at the time the contract was made. If a party succeeds in one of its clients, Bart Napier, was available to deliver the keynote speech during the opening dinner of the invalidating a liquidated damage provision, an aggrieved party may nevertheless recover any actual damages Conference. Mr. Napier was formerly a star quarterback with the Manisota Express of the Global Football that it can prove, subject to any defenses that may otherwise be available to the opposing party. League and founder of Athletes-for-a-Higher-Calling. Mr. Napier is now in great demand on the professional speaker circuit for his inspirational speeches on the importance of making good decisions in life, taking The applicable state/provincial law contains a new "dram shop" statute, which provides that "any person who responsibility for one's actions, setting good examples for our youth, and using the tragedies, failures, and serves or sells an alcoholic beverage to an individual who was obviously intoxicated to the extent that he or other disappointments that individuals occasionally experience in life as motivation to make positive impacts she presented a clear danger to himself or herself and others, shall be liable for any damages caused by such on society. intoxication." Mr. Napier was available on that date to speak at the Conference. SMP told the Talent Agency about PADD, For purposes of this negotiation, assume all amounts mentioned are stated in U.S. dollars. its members, and its mission. SMP also gave the Talent Agency some general ideas of what the speech should convey. SMP and the Talent Agency negotiated a contract, which PADD and Mr. Napier executed three Discussion Questions years ago (the "Speaker Contract"), shortly after the contract with the Hotel was signed. The Conference began as planned, and SMP was happy to report to PADD's Board of Directors during their Identifying relevant issues and subject matter for negotiation. meeting that afternoon that they had over 800 registrations for the Conference and appeared to meet their room commitment at the Hotel. Identify the interests of each party prior to the negotiation. 3. During the opening dinner that evening, Mr. Napier delivered a riveting and inspiring speech that drew a Strategize to create options and/or alternatives. standing ovation from those in attendance, and he stayed well after his presentation to mingle with the 4. ED audience, sign autographs, and have his photograph taken with PADD's Board and other members in What is PADD's BATNA? Page 5 of 7 The Art of Negotiation: A Hospitality Industry Case Study Page 6 of 7 The Art of Negotiation: A Hospitality Industry Case Study SSAGE businesscases SSAGE businesscases 6.C P ENG 1:03 PM Cloudy US 2022-11-27 32GB[ X Q seneca b Courses Bb *Mic X Launch N Bb Mock Int Bb 3407444 (247) Mo|06 Spinbot Q starbucks Starbuck Login Starbuck Microsof Microsof + X -> C https://learn-us-east-1-prod-fleet02-xythos.content.blackboardcdn.com/5c082fb7a0cdb/37528104?X-Blackboard-Expiration=1669582800000&X-Blackboard... @ to G 2 of 9 + | Page view A Read aloud | T) Add text Draw Highlight Erase | Jol JamPu pafans pup. sanssi upAAIal sAunuaDI AuPAI? uonelawInana negotiation Question-1 Documentation addresses only some of the issues and subject matter 1.35-2.98 Documentation does not address the requirements of the case study and 0 - 1.32 does not identify the issues and subject matter. Identification of interests Identification of interests of each party. Score (3 marks) Question-2 Documentation clearly outlines the interests of each party relevant to the 3 negotiation O Documentation only addresses some of the interests relevant to each party. 1.35-2.98 + No comprehensive identification. Documentation does not address the requirements of the case study and 0 - 1.32 does no identify the interests clearly, relevant to each party. BATNA for PADD Identifying the BATNA for PADD Score (3 marks) The documentation clearly outlines the best alternatives coherently. 3 Question-3 The documentation outlines limited alternatives to PADD 1.35-2.98 Documentation is incoherent and does not address the BATNA for PADD 0 - 1.32 completely as per the Case Study. BATNA for the Hotel Identifying the BATNA for the Hotel Score (3 marks) The documentation clearly outlines the best alternatives coherently. 3 Question-4 The documentation outlines limited alternatives to the hotel 1.35-2.98 Documentation is incoherent and does not address the BATNA for the hotel | 0 - 1.32 completely as per the Case Study. ENG 1:02 PM Cloudy US 2022-11-27 32