Attrition and cancellation penalties are becoming much more strict—with a new twist
By Tyler Davidson
While hot-button contract issues stay relatively the same over the years, economic conditions can vary wildly, with negotiating power shifting from buyer to seller and contract concerns such as attrition and cancellation carrying much more weight.
“Now that the pendulum is swinging back to where the hotels have the power, groups are very worried about paying damages,” says Lisa Sommer Devlin, owner of Devlin Law Firm, PC. “They’ve got a bottom line to fulfill, mortgages to pay and owners goals to meet. At the depths of the recession when customers might not have had the money, they might walk away from it, but that’s certainly not a trend they want to keep in place.”
According to Sommer Devlin, it’s all about leverage. With new-hotel construction lagging, supply is outpacing demand, and hotel operators are being less conciliatory when it comes to contract terms.
“I think that planners need to understand that if the economy improves and demand increases, there’s not a lot of hotels being built, so the hotels will be in a good position,” she says.
For meeting planners that are acutely concerned with attrition or cancellation clauses, Sommer Devlin recommends trying to just rent meeting space, such as in a conference center that doesn’t rely on selling room nights. Another piece of advice is to delay booking until the planner is more confident their group can fulfill the room block adequately. Read more...
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|Negotiating: Take 10 || ||Free On-Demand Webinars || |
Following are responses to some of the outstanding questions from our March negotiation webinars. Thanks to presenter Samuel Erkonen, of Howe & Hutton, Ltd., for really going above and beyond to address all of the unanswered queries!
| 1. Can you discuss mutual cancellation clauses and their enforceability? How can a group ensure their costs are covered if a hotel cancels the contract? Either side can always cancel (and breach the contract), but cancellation clauses are like an option, a “what will happen” in the event of a cancellation. To make sure costs are covered, make sure the hotel provides payment for such—everything from the costs of staff time to late night pizza to FedEx expenses (to announce the change) to cost differential for rooms, food and space. 2. I am booking a few years out and want to block 250 rooms. Is there a clause that I can add that will allow me to add an additional 100 rooms, if we need them at the same rate breakdown? Group shall have the right, subject to availability, to increase its block by up to 100 additional rooms at the group rate on or before DATE. || || Negotiating: Driving the Deal, Part 2 Once you know the key topics to be addressed in contracts, how do you negotiate to put in place the best contract for your organization without alienating your supplier partner? And how do you overcome common obstacles in contract negotiation? Learn more... Negotiating: Driving the Deal, Part 1 In today’s difficult economic climate, organizations must reevaluate their approach toward negotiating and managing their meetings contracts. How should groups approach hotels if they need to “renegotiate” the terms of existing contracts in order to avoid attrition? And what terms should groups seek in new contract? Learn more... || |
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Group business travel is not only on the rebound, but businesses are once again springing for perk-laden retreats to reward their executives. However, this post-bailout time around, the group getaways are not nearly as extravagant as before the recent recession. Read more...
WASHINGTON, D.C.—It appears the General Services Administration won’t be making a return trip to the posh M Resort near Las Vegas anytime soon. Read more...
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WASHINGTON, D.C.—ASAE is introducing a new Certificate Program in Association Management designed for professionals with less than five years of association experience. Read more...
ST. LOUIS—Maritz Travel, a global leader in providing full-service meeting, event and incentive travel programs to corporate clients, acquired Experient, another top provider of meeting and event services to associations, trade shows, corporations and the U.S. government. Read more...
DALLAS—Despite a sluggish macro economy, the overall exhibition industry posted a relatively strong rebound of 2.7 percent—finishing 15 percent higher than forecast. Read more...
HSMAI MEET Set for Anaheim
HSMAI is gearing up for the launch of its inaugural MEET West, offering complimentary registration to qualified meeting and event professionals, May 30-31 in Anaheim, Calif.
Carrying the tagline “the evolution of Affordable Meetings,” the conference will allow planners to earn up to 8.5 hours of continuing education clock hours—more than one-third of the required 25 hours toward earning a CMP designation.
The May 30 General Session will feature Janine Driver, a speaker and best-selling author, who will deliver her “You say more than you think: How to use the new body language to get what you want” presentation.
HSMAI’s MEET University will include more than 30 interactive environments, including hands-on demonstrations, case-study workshops and peer-to-peer roundtables.
To learn more about HSMAI's MEET West, visit www.hsmaimeet.com.