8 Hotel Contract Clauses to Review Post COVID19
Given every meeting under the sun has been canceled or modified in light of COVID19, hotel contracts have been received more and more attention. Clauses that were often ignored or overlooked in the past will become increasingly relevant for future contracts.
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
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 in the past will likely change in future contracts. Planners will also start to hear words like "commercial impracticability" added to force majeure clauses.
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 not be sufficient for planners.
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 potential for “no-fault attrition”.
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
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.
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 other competitive hotels in the immediate area.
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
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.
Through the ARISE Event Collective, Leanne Calderwood with ConferenceDirect is offering complimentary contract review services to planners who find themselves requiring advice when canceling their meeting.