As a resource to our clients we have broken down and explained several main parts of a hotel sales contract. This information is not intended to be a final resource on contracts, nor a source of legal advice. Instead, it has been provided for you to better understand a contract prior to receiving it. Although this information will be helpful, the best way to ensure fair treatment and great rates is to utilize hotel site selection services from a professional meeting planning company such as VenueQuest. We do not charge any fees to assist you in finding group lodging – we instead earn an agent commission from the hotel you choose. Learn more about how you can take advantage of our no-cost hotel site selection services.
If you have ever booked a hotel for a group of people, then chances are good you have dealt with a hotel sales contract. The purpose of a sales contract is to put in writing all the terms negotiated between the hotel and the customer. One of those terms is how potential changes in the contract over time are handled. Because a group booking is often planned many months or even years prior to the actual check-in, much can change between the time a contract is signed and when the event takes place. Therefore, it is critical the contract explains how those potential changes will be addressed.
| Attrition/Performance |
Attrition and Performance are interchangeable terms and are two of the most confusing terms in the meeting planning industry. When you block a number of rooms in a hotel at a specific rate, the hotel expects you to use those rooms so they do not loose money. However, hotel professionals understand your situation as well and know that it is nearly impossible to predict the exact number of rooms that will be used for an event, especially for large events booked well in advance.
Therefore, attrition was created to allow you to actually use a percentage of the rooms you block. Normally that percentage is within 80% - 95%. Obviously, the lower the percentage, the more advantageous the agreement is to the group. In exchange for that allowance, the attrition clause states that you also agree to pay for a minimum number of rooms regardless of how many people actually attend your event.
The implications of hotel attrition and performance policies have spawned much debate. The debate revolves around that fact that such a policy is not fully understood by most customers, and is applied in a slightly different way by almost every hotel. If you would like assistance with protecting your event or organization from attrition and performance costs, please seek consultation from VenueQuest today.
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| Concessions |
Concessions are the extras, freebies, upgrades, bonuses and goodies that are negotiated into a hotel sales contract. Everything is negotiable and there are many items you would never think could be included in your rate. For example, free suites and meals, frequent flyer miles, spa treatments, etc. If you want to make the most of your concessions, ask for assistance from a professional meeting planner like VenueQuest. As your hotel site selection specialist we will not only negotiate great rates, but work hard to build in many concessions as well.
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| Cut-off Date |
This is an important date that must be clearly specified in a contract. It is the date on which the hotel will no longer be obligated to offer your group rate or hold rooms for your attendees who have not already made a reservation. Typical cut-off dates range from 14 to 30 days prior to the arrival date.
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| Food and Beverage Minimum |
Similar to meeting room contracts, if your program does not call for any group dining or food and beverage service, then the contract should not contain food and beverage information. However, if you do request a hotel block rooms and function space for lunches, dinners, receptions or other events, you will most likely be asked to agree to a food and beverage minimum. This is often represented as a flat dollar amount that your group must spend on food and drinks, or be responsible for paying the unused balance as a penalty. If you encounter such a clause, make sure the hotel is providing guaranteed meal prices for your catered events and that your number of attendees is accurate.
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| Force Majeure |
Force Majeure is a clause that supercedes the above mentioned group cancellation clause. It used to be called the Acts of God clause, but the evolution of politically correct language and the terrorist attacks of September 11, 2001 led to a change in name and a change in language of this clause. It now provides a legitimate, penalty-free cancellation for groups affected by all manner of worldly events beyond their control. A well-worded Force Majeure clause can protect your group in the case of natural disasters, terrorism, government regulation, labor strikes and other instances beyond your control.
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| Group Cancellation |
Similar to attrition and performance, the group cancellation clause can be confusing and should be clearly understood. Fortunately, it is a clause that is not applied as often as attrition. Most hotels will include in their contract a penalty fee for a cancelled event, no matter what the reason. The fees are often established on a sliding scale based on how large the event is and how far in advance it is cancelled.
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| Group Rate |
Any contract for a block of hotel rooms will have a group rate and very often there will be several rates for different room categories such as single, double, triple and quad occupancy or suites. This is the rate the hotel agrees to hold for attendees making reservations between the time the contract is signed and the cut-off date.
There are definite advantages to negotiating a group rate. One advantage is the rate will often be lower than the rate offered to individual travelers. Another advantage is for events spanning an extended period of time, such as an association conference, final costs can be communicated to potential attendees in order for them to make an informed decision about whether or not to attend the event.
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| Meeting Space |
A group requiring only rooms should not have a contract with meeting space information. But if you are planning a meeting, conference, trade show, dinner or any other function, you will want to ensure the hotel is guaranteeing the proper amount of meeting space for your program. The contract should clearly specify which room (or at least the minimum size of a room if actual room names cannot be guaranteed), the time it will be available, the fees for renting that room and the number of people it will accommodate.
Meeting space can often be provided at no cost. If you would like VenueQuest to help you book a meeting without room rental fees, please send us your specifications.
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| Reservation Method |
Once you have a room block, a group rate and a signed contract, the individuals attending your event will need reservations. A room block does not allow attendees to show up and check-in. Because each person will have a different set of needs regarding arrival and departure date, smoking preference, single or double occupancy, handicap accessible rooms and more, they will each need a reservation.
This can be accomplished in two basic methods:
1. Individual call in – This is the easiest method for the coordinator and means each attendee will either call the hotel or go online to make their reservation. The attendee will need to know the name of the group or event and ask for the special rate for that group. Most hotels offer a unique code for each group and it may be helpful to communicate that code to your attendees. The hotel reservation call center staff normally are not located at the hotel and will probably not be familiar with your group or even the specific hotel your group is using. Being able to communicate a code rather than explain the name of a group can make a big difference in having a positive experience with the call center.
2. Rooming list – This is easier for the hotel, but will take some coordination on the part of the meeting coordinator. A rooming list is a spreadsheet or electronic download containing all of the names, arrival and departure dates and special requests for each of your attendees. If your attendees are required to pay for their own rooms, the rooming list will also need to include their credit card numbers. Online registration programs have greatly simplified the rooming list process. Learn more about online registration programs available through us.
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| Room Block |
| The contracted room block is the number of rooms held by the hotel for a group on any given night at an agreed rate. This is the foundation of the contract, because it allows a period of time in which attendees are guaranteed a room at a specific rate. Once the contract is signed, the hotel will take the contracted rooms off the market, making them off limits to any other customers until the cut-off date specified. During the time between contract signing and the cut-off date, all attendees who want a room, must make a reservation within the specified room block. |
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