Meeting professionals—and lawyers—are busy this spring examining performance clauses in group hotel contracts to assess the legal ramifications of meeting cancellations and postponements. And when meetings, conventions, and incentive-travel programs begin to relaunch after the pandemic, planners can expect executives to have an increased interest in event contracts and the level of financial risk their organizations will assume if faced with lower than expected attendance or the need to cancel.
At the same time, planners should expect properties to be equally concerned about protecting themselves and, while hungry for meetings, extremely bottom-line focused. Even before the pandemic, College of Coastal Georgia professor Tyra Warner (Hilliard), Esq., PhD, CMP, noted that hotels had become more revenue conscious. “Things that planners used to see as a given—for example, a 20 percent slippage allowance or getting credit for early arrivals and late departures—just can’t be taken for granted anymore,” she said.
Hotels, she said, are evaluating every revenue stream individually. “We used to look at a meeting as one big combination of revenue—sleeping rooms, food & beverage, meeting rooms, everything—but now hotels are really busting that apart and looking at each revenue stream. That’s why we’re starting to see things like hotels taking away concessions if the group is not meeting the food & beverage or sleeping room minimums. It’s not a brand-new trend, but I’m seeing it get stricter and stricter.”
Meeting professionals don’t have to be lawyers to be effective, they do need to know contract basics to reduce financial risk. Take our 20-question quiz to see how much you know about the major hotel clauses related to performance—attrition, cancellation, and force majeure.