Whether you are a managing an association’s annual meeting or marketing your event to attendees who have to opt-in and pay out of pocket, attrition damages are a concern when signing hotel contracts. In today’s healthier economy, attendance has been stronger for most events, but can still be hard to predict from year to year.
Most planners I worked with during my 20 years on the hotel side were very focused on 20% allowable attrition (sometimes asking for more than 20%). However, there are several other places in the contract that a meeting host can protect themselves from potential damages. Which rooms you get “credit for” can highly impact your overall numbers. What about all those people who come in early or stay on after the event ? And HOW those numbers are calculated (on a nightly or cumulative basis) also impacts your “performance”. Being able to re-sell any unused rooms can also lower any owed attrition fees. Not only do you want the hotel to try to re-sell your rooms but you also want to be very clear on what re-sold means. A contract is only enforceable when there are definite terms. You can’t have an agreement to agree.
Your overall attendance may be up, but if attendees choose to book outside the block at a non-contracted hotel, or book a rate they find on-line and not under your group block, that affects the meeting hosts rooms performance. Being able to get credit for rooms booked at a contracted hotel, but not under the block is another important step in preventing damages. But it needs to be included in the contract and not a conversation that comes up once an attrition situation arises.
The best written contract is customized to the hosts needs (and worries) and protects the meeting host from financial risk in a multi-layered approach.
There are many more steps that need to be incorporate on the marketing and execution of the event to continue to protect the meeting host from potential damages, but a detailed, well thought out contract is the best way to start.
Julie Shkolnik
– Vice President, Global Accounts at HPN Global
