How Negotiation Skills with Professor Michael Moffitt Saved Me Tons of Money in Central Americ

Katie D.

July 30, 2011 - 4:24 PM

I used to be terrified of bargaining, negotiating, or even talking about money. My first experiences in Central America in 2007 taught me that bargaining is part of life, and I learned a little about how to talk down a street vendor's price to purchase the perfect souvenir. But sometimes negotiations are more complicated than that. And that's how this trip has been different from others: now I have some actual negotiation skills.

The most important thing I learned in the 2010 fall term Michael Moffitt class was that negotiation is something that happens all the time, every day. We negotiate for seats in restaurants, for household chores, and even with ourselves as we schedule out our days. Negotiation is just a fact, and not something to be afraid of.

Which is why the class totally saved me yesterday.

I've been confronted several times this trip with some difficult situations, and with individuals trying to charge me more money as a kind of "gringo tax." It is unfortunate and sometimes feels deeply unfair, but it also makes sense: I have vastly more resources than the people here. That is a simple fact, so when people try to hustle me out of a few dollars, I generally bargain them down and then leave the situation feeling more or less OK about them and myself.

Yesterday was a different situation.

It began with a classic error in negotiation: we did not make an agreement before hand. I lived in Tegucigalpa with a host family arranged by my boss for two weeks before heading to El Progreso in Northern Honduras, and during those first two weeks we had not discussed how much I would pay the family for my stay. We started discussions several times, but our schedules didn't match up well, and I was assured that we would settle up later. I loved this family: they showed me around, talked with me about politics, current events and cooking, and the fourteen-year-old was thrilled I was going to be in town for her quinceañera, her fifteenth birthday, which is a huge deal in Latin America.

When I returned to Tegucigalpa, it was with the full knowledge that I would need to pay them for my stay. But when we sat down to talk, I discovered that they had decided that $35 a day was an appropriate amount, so by their math I owed them $1,085.

I remained calm.

I told them that this was much more than I expected, and asked them calmly (as I had been taught) "Where did that number come from?" They told me they had asked other foreigners what they paid for their hotel stays, and then had asked many people if $35 was fair. At this point, I had several thoughts:

1. I know they need money and this amount would probably make a huge difference to them.
2. They're trying to charge me for the two and a half weeks I wasn't living with them.
3. I can't even pay this if I want to because it's beyond my withdrawal limit.
4. I totally feel like I am being hustled.

If you've been reading my blog for a long time, you know that I'm a do-gooder and a sympathetic person. But these things only go so far, and this situation was business. So I bargained and negotiated and remained calm for half an hour of discussion. They seemed to think $500 was acceptable. I explained that more than $300 was impossible, and that more than $200 (the approximate rate I had paid for my home stay in Chile) was distasteful. I shared that my family in Guatemala had charged $30 per week, and that part of the point of a homestay was that it was a way to get to know the culture while paying dramatically less than a hotel. They explained that they weren't trying to take advantage of me, but that this was what they thought was fair and they wished they didn't have to charge me at all.

They told me that, even though $300 wasn't fair, they would accept that amount so I would feel comfortable. I was late to meet my friend and boss, Karen, so I decided to leave without pushing my point.

I engaged my BATNA.

A BATNA is a Best Alternative to a Negotiated Agreement. In this case, it involved some really humiliating public crying (one can only remain calm for so long), and then a discussion with Karen about what a fair price really was. I withdrew the money, and then had her drive me back to the house.

I paid $150 for my home stay, and packed my bags. I essentially chose to sever ties, and to pay an amount which still seemed high, but which I felt was basically acceptable. I stayed the night with Karen, and have no intention of seeing that family again.

I'm not sure this is the most Conflict Resolution-esq solution to the situation. But it is what seemed fair and what I can live with. And the ability to negotiate this with poise is absolutely a credit to my training.

Today I'm heading south for a two-week Costa Rican vacation with my mother. I am so grateful for this timing: I desperately need a break from all these complications and the emotional strain of this summer's work. I'm disappointed that this time in Tegucigalpa ended with losing my joy in my homestay situation, but I am glad I held my own in the negotiation. I so need of this vacation.

So, my thanks to Michael Moffitt for saving the day! I'm thrilled to report that your class has been put to good use.