by By Jonathan T. Howe, Esq. | January 01, 2009

While writing this article, all around me was the crashing sound of the equity and credit markets bottoming out. What this means for the meetings industry will have to sort itself out, but some issues need immediate attention.

Unlike post-9/11, when emotions ruled and the economy was stormy, the next rebound will not be a quick turnaround after pragmatism replaces fear. Still, we need to be careful not to stick our heads in the sand. When times are tough, too often we think it's only we who are impacted, not the other guy with whom we are doing business. But that's what your business partners are thinking, too.

Have the Discussion
The first thing meeting professionals must do is evaluate the impact of economic conditions on each event. Unfortunately, some hard positions might have to be taken and changes made, possibly weakening what otherwise might have been good business relationships.

One place where the give and take will get rough is over attrition. But on the plus side for planners, rate structures will change and vendor concessions might be offered as suppliers try to attract or keep your business. Hotels usually prefer to have heads in beds rather than checks for attrition or cancellation fees. Thus, planners will get opportunities to haggle as hoteliers try to keep programs in place.

Here is where contracts that have been carefully thought out might be of some help, providing "rescue" as opposed to "bailout."

For example, does your rate provision include a "most favored nation" clause? These paragraphs specifically provide that if the room rate offered at the time of your event is lower than the contracted rate, you are able to apply the lower rate to your program. This helps keep the hotel from selling against your block.

Consider Attrition
Plenty of planners are going to be faced with meager numbers for events that once filled or exceeded their room blocks. Look carefully at your agreements: Do your attrition and complimentary concession clauses give you credit for rooms occupied by attendees regardless of the rate they pay or how they make their reservations?

What provisions are in your contract for purposes of acceptable attrition and cancellation? While attrition might be the first thing we consider, many meetings, unfortunately, will be canceled because of the lack of attendance or severe budget adjustments by management. Sometimes cancellation is the only choice. Just look at AIG: The company might have been better off canceling rather than becoming the cause of a congressional investigation, even though the cost might have been the same. At least the perception might have been better.

Rethink Decisions

Depending on your industry segment, take a look at whether the venue you chose months ago still is appropriate, even if cost is not an issue. Does your agreement provide for review of commitments made? Also, can you reduce your block without liability?
Regardless of how your contracts are worded, the key to doing good business in these times is to work very closely with your counterpart and be honest about any bad news you might have to impart about your meeting.

For many years, I have told clients, "I cannot blame you for bad news, but I sure can blame you for not telling me." The sooner challenges are disclosed, the easier it will be to work toward a mutually agreeable resolution. Doing so will help you retain -- and might even enhance -- good professional relationships as the financial ship starts to right itself.

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