Hotel Contracting: 10 Tips

hotel contracting

During a recent Prevue webinar and in an accompanying white paper, Katie Muck of Meeting Sites Resource shared hotel contracting tips.

As Muck described it: “At MSR, our hotel and contract negotiation focus is to add value to meetings and the bottom line, with an emphasis on risk reduction. This includes a custom hotel contracting process (ready for signature) which starts the strategic negotiations process.” You can find her archived webinar here. and download the white paper here.

 Here are MSR’s “Top 10” hotel contracting tips

  1. Published Rates– After contract signing, hotel will not offer lower room rates via hotel website or discount travel suppliers. Any rooms booked around your block to be credited to your organization (include pre/post stays).
  2. Performance Damages– Based on lost profit, not lost revenue (i.e., $150 room rate X 75% room profit = $112.50. Food & Beverage (i.e., $10k F&B revenue X 35% profit = $3500). Do the math.
  3. AttritionGuarantee room block, not sliding scale “use it or lose it.” Example, 400 contracted rooms X 80% = 320 room guarantee (adjust attrition percentage based on demand over meeting dates).
  4. Cancellation– Sliding scale damages starting at 25% of profit, as meeting gets closer, maximum 75% lost profit (specify dates and do the math).
  5. Food & Beverage Guarantee – Calculate your food & beverage commitment from your RFP using mid-range menu prices. State your F&B guarantee, less 20% allowable attrition, (i.e., $30k F&B guarantee X 20% attrition = $24k final guarantee.
  6. Resell / Audit– Add to every contract and avoid liquidated damages, which calculate damages amount (or formula) to be paid to hotel with no resell obligation. Hotel audit to include print-out of occupancy by night, omit rooms out of service due to renovation and cross reference attendee list against in-house guests over your dates (include pre/post stays). Assign portion of damages to a future meeting.
  7. Breach By Hotel – Failure by the hotel to provide the rooms, function space and services as agreed shall render the hotel liable for all direct and indirect damages, expenses, attorney’s fees and costs incurred by your organization.
  8. Relocation – In the event the hotel is oversold and your attendee is “walked,” accommodations provided at a close hotel of similar quality (at hotel’s expense), guest transportation provided, paid phone calls, priority wait list to return, suite upgrade upon availability and in-room amenity / apology letter from General Manager.
  9. Construction / Remodeling There will be no construction or renovations over your meeting dates (specify meeting dates) that impact your meeting and guest experience (image, logistics, quality, noise, or disruptions).
  10. Unauthorized Changes Hotel shall not change or alter the contracted room block/suites, meeting or event space, F&B setups, audio visual, etc., without your written approval.

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Barbara Scofidio is editor of Prevue and heads up the Visionary Summits, our exclusive conference series targeting senior-level meeting and incentive planners. In 25 years of covering the industry, her articles have spanned topics ranging from social media to strategic meetings management. She is currently the media liaison for FICP's Education Committee and was the first member of the media ever to be invited to sit on a committee by GBTA, where she spent three years on the Groups and Meetings Committee. She has also been an active member of Site, chairing its Crystal Awards committee and acting as a judge. A familiar face at industry events, Barbara often leads panel discussions or speaks on topics close to her heart, such as green meetings or how the industry can help combat human trafficking. She is also on the board of ECPAT USA, the human trafficking organization. Barbara is based outside Boston, in Groton, Mass.

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