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8 Hotel Contract Clauses To Review Post COVID19

8 Hotel Contract Clauses To Review Post COVID19

Hotel contracts can include a mish-mash of legal clauses and information to protect both the hotel and the event host.  When times are good, some planners can overlook the often-tedious hotel contract clauses, especially when their meetings run like clockwork and have had no history of disruption.

In light of COVID19’s wrath on the meetings and events industry, all planners are now tasked with examining their future hotel contracts to ensure they are protected in case of future disruptions, both caused by external forces, and internal changes.

Here are some hotel contract clauses that may receive a second-glance by meeting planners in a post COVID19 environment.

8 Hotel Contract Clauses That Will Get More Attention Post COVID19

  1. Force Majeure – also known as “Act of God” or “Impossibility”, force majeure was likely the most misunderstood clause in hotel contracts.  Ambiguity and lack of definition made even the most senior meeting planners groan.  In light of COVID19, many hotel brands are re-examining their template for force majeure, and planners need to ensure they are covered under a variety of circumstances.  You’ll also start to hear words like “commercial impracticability” added to force majeure clauses
  2. Cancellation – Planners with no recorded history of cancellations will now need to pay special attention to both the cancellation dates and the financial penalties attached.  If a cancellation needs to occur outside of force majeure, hotels will be keen to collect on fees owing.  Most hotels are looking at booking windows for cancellation inside 6 weeks and that may be insufficient for planners.
  3. Guest Room Attrition – Planners with a history of good pickup on their former guest room blocks are now playing a magical “guessing game” as to who will and will not show up for future events.  Planners should inquire about additional flexibilities in their guest room block including the option for “no fault attrition.”
  4. Room Block Review Dates – In addition to increased allowances in guest room attrition, having the option to review the block and release rooms accordingly may help both planner and hotel with inventory
  5. Food and Beverage Attrition – Planners should also be cognizant that lower numbers will also result in lower guarantees for food and beverage.  Ensuring you can meet or exceed your new food and beverage minimums with your fluctuating numbers.
  6. Rate Parity – This clause can be often overlooked, but may receive more attention in the years ahead as planners work to ensure their rates are on par with other group business in the hotel and competitive hotels in the immediate area.
  7. Rate Renegotiation – Another clause that was sparingly used, rate renegotiation can be requested by the planner to ensure rates are in line with economic conditions
  8. Rebooking – This clause outlines the  option to hold a future program if a planner has to cancel, with partial or full cancellation fees applying as a credit to the future event.

At ConferenceDirect, our role is to ensure we craft and review the right clauses for your program.   As your advocate, we’re here to ensure hotels consider the needs of the planner while maintaining positive hotel relationships.

As part of the ARISE Event Collective, Stephen and Leanne are offering complimentary contract review services to planners who find themselves requiring advice when canceling their meeting.  Connect with Stephen and Leanne, and reach out to the other ARISE Event Collective professionals here.

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