Saturday, August 8, 2015

Common Contract Missteps Every Meeting Planner Should Avoid

It doesn’t matter if you are brand new to the meeting industry or a seasoned veteran, venue and supplier contracts can seem overwhelming at times. They are full of conditions and many legal terms you may or may not be familiar with.

This blog will break down common contract language so you can enter your next negotiation talks with some ease.

Remember this, too: According to The Business Journals, events represent:
·         60% of room revenue for convention oriented hotels and
·         33% of that same revenue for luxury hotels.

Bottom line: The hotel and/or conference center you working with wants your business as much as you want to give it to them.

Why have Written Contracts?

If you are like most planners, you are working on your event several months, if not years ahead of time. People come and people go, but the event carries on.

Contracts ensure consistency. Regardless of whether you, the sales manager or GM are still around, someone within your organization can run with the event because everything is spelled out – from the room block to the cancellation provisions.

If at some point you need to change the contract, have a meeting with the vendor, take notes, send an email to your supplier about the agreed to changes and ask for a written addendum to the contract.

Remember: Written contracts trump everything else; including emails, conversations and notes from a meeting.

What are Common Missteps and how can they be Avoided?

Here are five common contract problems:

Misstep #1: Room Rates are not Firmly Established.

Whether you are booking 5 or 5,000 rooms, you need to give your attendees a firm rate in the registration materials. You want to do some research and make certain your rates are competitive with aggregate hotel portals so your attendees won’t find better rates outside the block.

Misstep #2: You Aren’t Paying Attention to Your Attrition Clause.

At some point during the registration process, you are going to have to return all unused rooms back to the hotel. If you hold onto the block past the release date, in hopes for last-minute registrants that don’t come, you can be paying thousands of dollars in attrition fees.

The best bet? Communicate often to your attendees about their need to book their hotel room. Be transparent and let them know when that rate ends. Send tailored emails to individuals that have registered for your conference but not booked their room yet. If you do all these things and the attendee still doesn’t book their accommodations, don’t worry about it. Release the block on the date you agreed to with the hotel.

Misstep #3: You don’t have the Deposit and Payment Schedule Nailed Down.

Whenever you sign a contract with a supplier, a dollar or percentage deposit will be expected. The things you need to identify are: Is this deposit refundable or non-refundable? What are the conditions of a refund?

Regarding payments: Will you have a Master Account? Who is authorized to add to it? What expenses are attendees, exhibitors and sponsors responsible for and which one are you taking on? When is payment expected? What form of payment does the venue accept?

I suggest you get all this in writing in the contract including who is responsible for what and probably most important, who has the authority to add to the Master. In addition, at the end of the day, take the time to review the Master Account with your hotel point person so you can identify and resolve any problems while you are still on property.

Misstep #4: You don’t have a Force Majeure Clause in Your Contract.

What is Force Majeure?

This is a common clause in contracts that frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, hurricane, flooding or earthquake prevents one or both parties from fulfilling their obligations under the contract.

Enough said. You must have this in your contract or you could be liable for thousands of dollars of expense at an event where no one came.

Misstep #5: You have no Indemnification Clause.

What is the Meaning of Indemnify?

Indemnification is a guarantee against any loss which another might suffer. For example, if one of your attendee’s tripped over an unsecured cord that was not taped down by the AV provider, and that attendee sues your organization and the AV Company, you want to be held harmless and not be held responsible for something the vendor did. 

Always have this clause in your contract in order to avoid opening yourself up to lawsuits. 

About Kalahari

Kalahari has state-of-the-art meeting facilities mixed in with recreational activities that include America’s largest indoor waterpark and a full-service day spa. Check us out at or call us at 855.411.4605 to speak to an experienced Account Executive about your meeting needs! 
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