Contract Language

Leslie Blair, CMP
Leslie Blair, CMP

For the past three or four years, we’ve been operating in a buyer’s market.  That is changing, and as a result, contracts are changing.  Flexibility and willingness to eliminate certain clauses have gone by the wayside, only to be replaced by stiffer attrition and cancellation penalties and higher rates, just to name a few.  But, no need to despair!  Here are a few tips discussed during the Meetings Expo idea swap.

Even though the market is recovering, there is still a lot of volatility in the ownership/management side of the hotel business, i.e., flags are changing and owners are changing.  It’s good practice to include a “change of ownership or management” clause in contracts.  Such a clause can allow the planner the option of cancelling the program without any financial obligations if the hotel changes owners. 

Hoteliers expressed concern that at times, some planners don’t really understand the financial ramifications of attrition and cancellation.  They’re instituting procedures that require them to “walk and talk” the planner through those clauses and discuss with them exactly what the amounts will be if they incur attrition, or if they decide to cancel.  Both planners and suppliers believed this was a positive step.

And finally, there was discussion of adding the verbiage “in whole or in part” to force majeure clauses.  Typically, we think of this clause coming into effect when the entire program is cancelled, but by adding this wording, it might help eliminate some attrition fees if say for example, part of your attendees were prevented from attending a meeting due to strikes or weather conditions in their part of the country, even if those conditions weren’t in effect in the location where the meeting was being held.

One of the best resources for not only contract language, but overall industry education is through the Convention Industry Council Apex initiative.  You can find it via the following link:

http://www.conventionindustry.org/StandardsPractices/APEX.aspx

Leslie Blair, CMP
Account Executive
VIKTOR Incentives & Meetings