Last month we discussed clauses that are important for corporate meeting contracts. This time around, we are addressing the association side.
Unlike corporate planners, whose attendees often have no choice but to show up, association planners are left at the mercy and discretion of their attendees -- and their attendees’ wallets. If the program does not fit their schedule or interests or is too expensive, association attendees might take a pass.
Since one of association planners’ biggest fears is guaranteeing attendance, they especially need to be concerned with attrition clauses for sleeping rooms, food and beverage, or other aspects of the meeting that hinge on the tally of dollars or attendees.
Attrition clauses for association meetings should be based on the most current history of the event. The agreement should outline when and by how much the association may reduce -- or, under certain happy circumstances, increase -- the group’s room block. Both planner and supplier should have mandatory review dates to let each other know exactly how the program is filling up.
The clause also should spell out how attrition fees will be calculated. In days gone by, attrition was computed on the total number of room nights used, what is called a horizontal basis. Today, attrition fees more often are based on a day-to-day or vertical calculation. If on Tuesday your commitment was 100 room nights but you only picked up 75, and on Wednesday, with a room block of 150, you picked up 175, you would not get credit for the additional 25 rooms picked up on Wednesday.
Who is Responsible?
Often, we note in association contracts that the host organization is not responsible for any damage or claims that might result from the activity, acts or omissions of an attendee who has booked the hotel through the association room block. It is imperative that each person be responsible for his or her own acts or omissions. In other words, the association should not be responsible for what the attendee does or does not do.
For the association planner in particular, an event’s history can be a very important bargaining tool. Thus, the contract should require the hotel to provide a comprehensive documentation before the host will pay the master account. To be included in the history, along with room pickup and F&B, would be items such as covers in restaurants, hospitality suites, business center costs -- any spending in the hotel by your organization. You should provide, as part of your initial agreement, a history form to be completed later by the property, and the contract should outline an opportunity for you to review this report to check its accuracy.
Like their corporate counterparts, association planners should spell out who is authorized to make changes and endorse charges to the master account. Specify that without proper authorization, the expense will not be paid.
During many association programs, suppliers and sponsors host events in hospitality suites. To facilitate this, the association planner should put an “all suite hold” provision in the contract subject to release upon notification to the association. This way, the supplier who wants to rent a hospitality suite needs to go through the association to set it up, and you can require the supplier to sign an indemnification agreement to guard the association against anything untoward that might happen there.
Jonathan T. Howe, Esq.,is a senior partner in the Chicago, St. Louis and Washington, D.C., law firm of Howe & Hutton Ltd., which specializes in meetings, travel and hospitality law. Legal questions can be e-mailed to him at firstname.lastname@example.org.