Study sheet: International Hotel Negotiation

📋 Course Outline

1. Negotiators and Core Skills
2. Bargaining Types and Objectives
3. Negotiation Preparation Process
4. Power Analysis and Approach
5. Issues, Offers, and Concessions
6. BATNA and Agreement Zones

📖 1. Negotiators and Core Skills

★ Must-know

• Hotel negotiation may involve:

  • third-party mediators
  • salespeople
  • procurement managers
  • project managers
  • department heads
  • students negotiating with teachers
  • children negotiating with parents

• Effective negotiators need:

  • excellent communication, especially listening
  • diplomacy and people skills
  • concession management
  • business sense
  • debate principles
  • good planning

• Good planning should account for the situation and the opponent, and the course estimates that it determines 70–75% of the negotiation outcome.

Further detail

• 🔄 Debate principles require negotiators to: establish the facts, introduce information, question information that is off, skewed, biased, or framed

📖 2. Bargaining Types and Objectives

★ Must-know

• 🔄 A negotiation may proceed through: introductions and preliminaries, presentation of objectives by both parties, questions, counteroffers, concessions, agreement, continued negotiation, or no agreement

📌 Distributive bargaining seeks to get as much as possible in a win-lose outcome, whereas integrative bargaining expands the pie to produce a win-win outcome.

📌 Distributive bargaining focuses on positions, limited information sharing, short-term relationships, and non-creative solutions, whereas integrative bargaining focuses on interests, information sharing, long-term relationships, and creative solutions.

Further detail

• In integrative bargaining, negotiators ask why an issue is important to the other party, while distributive bargaining emphasizes fixed positions such as “I can't move; you have to move.”

💡 Memory Hook

Distributive takes the largest slice; integrative expands the pie.

📖 3. Negotiation Preparation Process

🔑 Key Concepts & Definitions

• BATNA : or best alternative to a negotiated agreement, is the second solution or plan B available if the negotiation fails.
• Reservation price : or walk-away point, is the minimum outcome a negotiator would accept and is related to the BATNA.

★ Must-know

• 🔄 Step 1 preparation consists of: defining the primary objective, specifying and quantifying issues and priorities, identifying secondary objectives, determining the BATNA, setting the reservation price

📌 Objectives should be realistic but ambitious, clarified and quantified, connected to the deeper objective behind the surface request, and separated into offensive and defensive objectives.

• Negotiation issues may include:
  • quality
  • deadlines
  • guarantees
  • payment schedules
  • quantity
  • price

📌 Offensive objectives pursue opportunities such as increasing quantity to maintain pricing, whereas defensive objectives address risks such as slower deadlines, shorter payment terms, or increased capital outlay.

Further detail

• A primary objective can be avoiding the loss of last year’s deal or obtaining better delivery guarantees.

💡 Memory Hook

Objectives → BATNA → reservation point → opponent analysis.

📖 4. Power Analysis and Approach

★ Must-know

• Step 2 analyzes the other party’s: arguments and strengths, weaknesses relative to your position, possible responses, topics or questions to avoid, BATNA, likely action if no agreement is reached, negotiating competence

📌 A power struggle can place you as the leader with a stronger position, the follower with a weaker position, or in a neutral partnership where both positions are similar.

• The three possible negotiation approaches are:
  • defensive
  • constructive
  • offensive

Further detail

• A strong BATNA makes the other party more demanding in a face-to-face negotiation because they have a credible alternative.

• Negotiators can rate their position numerically from 1, the weakest, to 10, the strongest, with 5 representing a neutral position.

💡 Memory Hook

A strong position supports an offensive approach, while a weak position calls for defense.

📖 5. Issues, Offers, and Concessions

★ Must-know

• 🔄 Step 3 requires:
  1. listing the issues
  2. putting them in priority order
  3. quantifying the objectives

📌 The more issues there are to discuss, the more concessions can be traded between the parties.

• A negotiation slide chart can distinguish:
  • a dream deal
  • realistic level
  • comfort level
  • red-flag zone
  • break-off point
  • first or ceiling offer

Further detail

📌 To avoid a stalemate, negotiators should create as many package scenarios as possible, with four or five good packages suggested as a target.

📌 A negotiator should try to raise more issues or demands than they lower during the negotiation.

💡 Memory Hook

List issues → prioritize → quantify → package → trade concessions.

📖 6. BATNA and Agreement Zones

🔑 Key Concepts & Definitions

• ZOPA : or ZOPA, is the overlap between the buyer’s and seller’s acceptable agreement ranges.

★ Must-know

📌 A negotiator uses the BATNA as leverage by walking away when necessary and presenting the alternative offer to encourage the current supplier to match it or add a benefit such as delivery.

• For bottled water, the current supplier offers $0.80 per 50 CL bottle delivered weekly, while Supplier B offers $0.72 per bottle with biweekly delivery and Supplier C offers $0.75 with free delivery and flexible payment terms.

• The restaurant’s BATNA in the bottled-water example is buying from Supplier B at $0.72 per bottle.

Further detail

• In one buyer–seller example, the buyer’s ceiling is €7,000 and break-off point is €6,300, while the seller’s break-off point is €5,900 and ceiling is €5,000, illustrating the need to compare acceptable ranges.

• Hotel BATNAs include:

  • alternative suppliers
  • in-house production or service
  • product substitution
  • delaying the purchase
  • bulk purchasing with other hotels

💡 Memory Hook

The BATNA is the alternative outside the deal; the ZOPA is the overlap inside it.

📊 Synthesis Tables

Distributive and Integrative Bargaining

Dimension	Distributive	Integrative
Character	Get as much as possible	Expand the pie
Goal	Win-lose	Win-win
Focus	Positions	Interests
Information sharing	Low	High
Relationship	Short-term	Long-term
Solutions	Not creative	Creative