No meeting planner signs a hotel contract with the expectations that they will pay attrition, cancellation or other non-performance damages. The reality is that "things change" and meeting planners face a multitude of factors out of their control, which creates challenges that impacts their meetings...and bottom line.
What can go wrong? Let’s start with the current economic turn down, which impacts travel and meeting budgets. Then we can factor in unstable energy costs, which affects attendance. Of course, we can’t forget the record setting mergers and acquisitions taking place in corporate America and the fall-out of management changes, postponed product launches and often reduced company profits.
Regardless of the reason or the season, planners must be prepared and have a clear plan, which starts with your hotel contract negotiations.
MSR Tips:
· Always include a resell clause, that clearly states that resold rooms, regardless of the room rate, will be credited to your meeting.
· Guarantee 80% of your room block and avoid sliding scale attrition that you “use it or lose it.”
· Meeting cancellations based on sliding scale with percentages increasing as meeting dates get closer.
· Attrition and Cancellation damages based on lost profit, not lost revenue (75% sleeping rooms / 35% food and beverage)
· Contract specific food and beverage guaranteed based on your overall meeting agenda including an allowable 20% attrition ($40k food and beverage guarantee X 20% = $32k actual guarantee).
· Apply all or a portion of damages to a future meeting to be placed at the same hotel (six month time frame to sign new contract)
· Add published rate clause – no lower room rates to be offered over your meeting dates and if attendees book rooms through the hotels or travel websites, your meeting gets credited for these rooms
In the event of attrition or cancellation damages, conduct a rooms audit including:
· Request a hotel sleeping rooms inventory/occupancy report by night
· Verify how many rooms, by night, were out of service due to renovation or repair
· If attendees made their own hotel reservations (verses rooms on master), provide the hotel with an electronic registration list so they can cross reference against all in-house guests over the meeting dates.
· Capture any pre or post room nights
If you still have damages, do you have a rebooking clause? If damages are due, are they based on lost profit or lost revenue?
Since we can’t look into a crystal ball and predict the future, it is important that planners be prepared in the event “things change” and that they have a clear path to work with the hotel to mitigate damages and minimize the risk to your organization.
Tim Brown is a Partner with Meeting Sites Resource based in Irvine, CA. The company specializes in meeting site research and hotel/contract negotiations, domestically and internationally. The company also offers full-service planning and Staff On-Site (SOS) for professional on-site meeting management/logistics support. Tim can be contacted at 949-250-7483 ext. 312 or by email at
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