June 01, 2002
Meetings & Conventions: Planner's Portfolio June 2002 Current Issue
June 2002 lawandplan.gifPLANNER'S PORTFOLIO:

The Law & the Planner

By Jonathan T. Howe, Esq.


Planners should be watching for new wording in hotels’ standard clauses

When presented with a standard boilerplate contract, many planners mistakenly assume they’ve seen it all before. They give it a quick glance, sign it and send it off. The problem: Chances are it isn’t the same old contract.

Following are some areas to peruse where hotels might have changed language since the last time you looked.

Many contracts provide for a cutoff date when rooms that have not been reserved by the group revert to the property for resale. These clauses previously stipulated that attendees who tried to book after the cutoff would have the opportunity to book those rooms on a “space available” basis.

The new language not only specifies space must be available, but the negotiated rate must be available, also. Chances are, however, that rate won’t be available. Planners should try to get the wording changed to something like: “The last room available, regardless of published rate, shall be sold at the convention rate.”

Until recently, most attrition clauses were based on the total room pickup for the duration of the meeting. This is what I call a “horizontal” calculation. In other words, if you had 350 room nights booked over three days, regardless of the number of rooms used per night, you would not have an attrition charge if your total pickup was 350.

Today, however, those clauses often are calculated on a “vertical” basis. Attrition is based not on the total room nights you pick up, but on how many room nights you use each day. If you have promised 100 room nights on Monday and 200 on Tuesday, you’ll be charged for falling short on Monday even if your numbers far exceed the block on Tuesday.

Does the hotel impose resort fees, service charges or early departure fees? These are just a few of the surprises that have appeared on attendees’ bills over the past year or so.

If these charges are unacceptable to your group, the contract must state so. And, if that’s the case, you should advise attendees that such fees should not be signed for at checkout.

On the other hand, if the charges are agreed upon in the contract, it should also specify that early departure or forfeiture of deposit fees will be counted toward your attrition costs. You want credit for “a room paid for,” not “a room paid for and occupied.”

Recently, we have seen hotels selling against the meeting planner’s block. For instance, a planner blocks 1,000 rooms in a 2,000-room hotel. The hotel then goes directly to the attendee base, generally exhibitors, and offers them a better deal than the negotiated rate. Then the hotel refuses to credit the group for the rooms bought outside the block.

This can happen unintentionally, too, with attendees finding Internet deals or other discounts. Planners should be assured that if a person from the group has booked a room, the group gets credit, no matter the rate paid or means of booking.

Always make sure there is a comprehensive statement in the contract stating that the group will be credited for all guests on the event’s registration list. A provision should be made that the planner will be able to cross-match housing lists with the hotel’s. Many times the name on your list might not match the hotel’s. For example, I might be “Jon Howe” for the meeting, but “Jonathan T. Howe” for the hotel to match credit card requirements. Make sure you have the right to verify the names so every head is counted.

Jonathan T. Howe, Esq., is a senior partner in the Chicago 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 askhowe@ntmllc.com.

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