Every day brings news of construction and expansion. Plenty of new venues are coming on line; plenty of old properties are undergoing major renovations costing tens of millions of dollars; and new spas, meeting space and recreation areas are being added across the board. With so many hard-hat projects under way, meeting professionals are right to worry whether the venues in question will be able to meet their deadlines and contractual obligations.
A LEAP OF FAITH
In most instances, properties are willing to give substantial financial discounts to the first organization that books its new facilities. The planner who takes this opportunity, however, should be aware of what might happen should the opening be delayed.
In one situation recently, we represented a very substantial client that was going to be the first to use a major convention center. In the contract with the center, we required that a monthly progress report be provided from the construction site. The reports were most reassuring and, in fact, showed construction was on schedule for an earlier completion than anticipated.
The problem, however, was that while the building was completed, the facility was not quite ready to fulfill the other obligations of the contract, such as providing signage, parking, audiovisual equipment and more.
In another instance several years ago, I scouted the convention facility as the meeting date approached and reported back to the organization, “Yes, I know where the breakout sessions will be because I saw the chalk marks on the floor.”
In situations such as this, planners need to be sure that their contracts require services as well as the concrete to be in place.
With new hotels, similar issues might evolve. A property might be able to provide the sleeping rooms but not other amenities, such as the restaurant, fitness center or business center.
IN THE AGREEMENT
If your organization has decided to take the plunge and be first in, here are some issues to be sure are covered in your contract.
1. The facility should provide regular updates on the status and expected completion of construction, covering all aspects of the project.
2. The facility should provide regular updates concerning all other amenities, from restaurants to the gift shop to the spa, including when they will be in place and fully functional.
3. The facility and the planner should create the opportunity to review the construction’s progress together. The planner should be able to determine whether the facility will be able to provide the support for their event that is expected under the basic contract.
4. The contract should specify the minimum that needs to be in place physically and give assurances that adequate numbers of trained staff at all levels will be on hand for all needs.
5. Any and all security issues should be addressed, including trained staff, evacuation plans, etc.
6. All appropriate government approvals such as a certificate of occupancy, health and sanitation certificates, and safety requirements must be met. You don’t want the kitchen shut down 20 minutes before your banquet because of a failure to meet health codes. (Yes, this has happened.)
7.The venue should agree to be responsible for covering the cost of relocating the event if the contract terms cannot be met.
The meeting planner and the venue representatives should agree upon the requirements the venue must meet to avoid cancellation of the event without liability. The key is good communications among the parties.
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 email@example.com.