ATTRITION Rx: SURVIVAL AND PREVENTION

share

share

Back to Basics

By Louise M. Felsher, CMP, CMM

ATTRITION Rx: SURVIVAL AND PREVENTION

Some words of advice and actions to take when the room block falls short

Nothing throws off a budget, threatens job security or strains a planner/vendor relationship faster than an off-balance room block and a colossal attrition invoice.

A meeting contract’s attrition clause generally is invoked when the group falls short on the sleeping room block although it can come into play when there is a reduction in any promised revenue, such as food and beverage or even spa usage.

Attrition used to affect client-reliant programs, where attendees pay their own way, to a greater extent than events that have a more structured and guaranteed attendance, such as a corporate sales meeting. However, the introduction of new threats to room pickup including industry competition, economic and political instability and, of course, discounted and brokered hotel rooms available on the Internet have made attrition a serious issue for all types of planners.

LEFT WITH THE BILL
Unfortunately, despite a planner’s best efforts and a rock-solid attrition clause, organizations still find themselves slapped with huge fees. If you have a strategic plan in place and have discussed the possibilities of attrition with your vendor, you are already way ahead of the game.

It won’t just go away. When the bill comes, never assume you can get out of paying attrition. Attrition is neither a suggestion nor an option it is contractually agreed-upon revenue.

Compare and contrast. Don’t be afraid to ask the hotel to compare your attendee list to its room records. Some attendees might have slipped through the official room block.

Know your organization. Always know what your firm’s total buying power is. Sometimes, attrition can be spread out over future business outside your division.

Arrange internal help beforehand. An often overlooked opportunity for handling attrition charges is to set up a reciprocal agreement with other event teams in your company. If a corporation has decentralized its event planning or has subsidiaries or geographically dispersed offices, get planners in those areas to agree to help each other during times of serious attrition by taking on future contracts with the property or by moving programs to that property.

Put good faith first. One of the best ways to address attrition is to spread it out via signed contracts for future business. “With a good working relationship, those involved generally will find a way to minimize or mitigate these fees,” says Joe Curran, director of group sales at San Francisco’s Palace Hotel.

Get out the checkbook. Sometimes, you just have to pay. Period. In these cases, a staggered payment schedule usually can be arranged.

PREVENTION
Avoiding attrition charges starts with a good contract and an accurate room assessment. If you are planning a new meeting and don’t have room-pickup history, discuss the situation with your vendor partner, then err on the side of an underblock and base your break-even budget on lower attendance.

Reconsider the language. Simplify your attrition clause formulas. Many are extremely complex and can involve percentages of percentages based on several sliding scales and numerous conditions.

Estimate with precision. Never block more space than you need, in the attempt to get a better room rate or better meeting space. And never give false pickup history. Play fair; it’s in everyone’s best interest.

Ask for help. If you’re unsure about how effective your attrition clause is or you have any other questions concerning the contract, contact a lawyer who is well-versed in meeting agreements.