With corporations and associations being socked with hotel attrition bills after holding conferences with poor attendance, many hotels are attempting to alleviate planners’ fears by offering to forego an attrition clause in new contracts. In some cases the hotels are probably attempting to capitalize on the planners’ fears of whopping post-conference attrition bills, but some planners are actively seeking hotels who are offering this.
Here’s why it’s a big mistake: If there is no attrition clause in your contract, your group is responsible for 100% of the room pickup. That’s right, not 90% or 80% but 100%.
The contract basically says that the hotel agrees to provide X number of rooms at the rate of $Y to your group, and in turn your organization agrees to guarantee that those X number of rooms will be picked up by the group. In the absence of an attrition clause, that’s the guarantee, end of story.
Add an attrition clause at say, 80%, and suddenly you are only responsible for X multiplied by .8 number of rooms. In today’s market, some hotels may be willing to go even lower than that 80% rate. I have been able to negotiate 50% for one client in particular.
Another idea, and an even better one, is when you request “no attrition” write your own clause. It should read something like this:
The room block above is an estimate based on group history and the Hotel will not charge the Group for unused rooms.*
So by doing this, you are in essense saying that your group will not be held responsible or charged for any unused rooms in your block.
To be fair to the hotel, you should at the very least have a reasonable cutoff date where the property can recapture some of your unused rooms and release them for general sale. It’s also a good idea to add a clause that allows both group and hotel to review and make adjustments to the room block 6-9 months prior to the arrival date, so you can compare with your previous year’s pickup to see what will be reasonable.
Future post: “When a lowest rate clause can come back to bite you”
* Please note, I am not an attorney and any advice provided in this article is solely based on my own experience. Readers should always consult an attorney before using any recommended clauses or wording