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August 21st, 2012

If you need to book a hotel for a conference, you will quickly become familiar with the intricacies of the hotel sales contract. They are convoluted enough that lawyers hold seminars about them. Because conference bookings are often done a year or more in advance, the hotel sales contract must explain how to manage potential changes in pricing, availability, equipment, and so on.

Are you ready to sign a Venue Contract?

We are certainly not providing you legal advice on your contracts, for which you should consult an attorney. However, we will define the major clauses and contract elements to give you a good start at understanding hotel sales contracts. Today, in Part 1 we will define:

  • Attrition/Performance
  • Audiovisual (AV)
  • Concessions
  • Cut-off Date
  • Food/Beverage Minimum
  • Force Majeure

In Thursday’s Part 2, we will give you the scoop on:

  • Group Cancellation
  • Group Rate
  • Meeting Space
  • Reservation Method
  • Room Block

Let’s get to it!

Attrition/Performance

The interchangeable terms ‘Attrition’ and ‘Performance’ and are possibly the most confusing terms in the hotel and conference industries. If you book a certain number of rooms, for lodging as well as breakout sessions with Audience Response Systems (ARS) and other CRE meeting technology, the hotel will expect them to be used and paid for at the agreed rate. Hotel professionals realize the near-impossibility of predicting room reservations accurately, especially when booking in advance, and typically set the contractual obligation at 80-95% of the full booking. Unless the hotel is able to book those rooms at the last minute, you’ll pay for this minimum irrespective of attendance, so consider your needs carefully before reserving.

Audiovisual (AV)

Audiovisual equipment services included in the contract (sometimes as an “exclusivity clause” and sometimes as part of the Food & Beverage package), is often worth negotiating. The in-house AV provider may be limited in both variety of equipment and technical support. And, using an outside company like CRE for your audio visual (AV) equipment rentals, for the keynote presentation and everything else, is usually far more cost-effective than renting from the hotel.  Be sure to look into local AV rental options before signing away your options.  

Concessions

Concessions are all the extras, upgrades and freebies included in the contract. Absolutely everything is negotiable and the number and variety of extras that can be included in your rate may surprise the uninitiated. You can get free suites and meals, use of the spa, frequent flyer miles and more. Negotiate like a pro (or hire one) and you’ll save enough for extra plasma display rentals or other equipment.

Cut-off Date

This vital date must be clearly defined in the contract, as it’s the date that your group rate and room reservations expire. A typical cut-off date is from 10 to 30 days before the arrival date.

Food/Beverage Minimum

If you are reserving space for receptions, cocktail hours, lunches, dinners or other events, you will be negotiating a food and beverage minimum. This may be a flat dollar amount that you must spend on food and drinks, and you may be responsible for the unused balance. Make the hotel guarantee the meal prices for any catered events and ensure your attendee count is accurate. 

Force Majeure

Force Majeure supersedes any group cancellation clause (covered in Part 2) and was once called the “Acts of God” clause. It offers a penalty-free cancellation if your plans are altered by “events beyond control,” protecting you against losses from terrorist acts, government regulations, natural disasters, labor strikes, and other situations beyond human control.

From the finest event production rentals to potent post-production technology, our expert Account Executives are ready to help you with a single call or e-mail, or you can help yourself wit our Quick Rental Quote form!

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