MPI’s Meetings Outlook 2018 Summer Edition planner responses indicated that while “66 percent predict favorable business conditions, only 3.1 percent say negotiations are becoming simpler.” In contrast, 54.9 percent of respondents claim contract negotiations are becoming more complex. Today’s hotel meeting contracts are getting longer and longer and that would certainly indicate more specificity, if not more complexity. Whether contract trends are new or old, it is the meeting professional’s responsibility to read every single word of the contract carefully and seek advice from their legal counsel as warranted.
What should be keeping you up at night?
In August, Electronic Arts (EA) secured the GLHF Game Bar, for its Madden Football Gaming Tournament. Someone planned that event, but no one checked to see if the pizzeria/game bar complied with local ordinances. It had not, failing to secure building plans and being issued three fire code violations. A 24-year-old gamer walked into the venue with a gun, killed two, injured 11 others and then took his own life. Lawsuits are beginning to surface, naming both EA and the pizzeria as defendants, claiming that it was the responsibility of both to provide a safe place for the participants. This is not the first time a venue has been sued for failing to provide a safe place. In 2012, in Aurora, Colo., a man walked into a movie theater and killed 12 people, wounding more than 70 others. Victims sued but ended up owing the venue hundreds of thousands of dollars. Because of the building and fire violations, these lawsuits may yield a different decision.
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What does your contract say about safety and security protocols? Do you have procedures in place to ensure compliance? This is a complicated issue and most likely one you should seek professional guidance to protect your organization.
What about boilerplate clauses?
Attrition, force majeure, cancellation and liability clauses are just a few of the clauses considered by most to be boilerplate clauses. When you receive a contract, is your inclination to start reading a clause and stop part way through it because you are sure you know what the rest of it says? Don’t glaze over them. Read them thoroughly and check them against clauses in other contracts you manage. Is there something different between the two?
For instance, if the attrition clause in another contract sets out your room nights as cumulative, does the draft contract describe them as being on a “per night” basis, such that you could oversell your room block on three of four nights but undersell one night and face attrition penalties?
2018 has seen a fair share of weather-related deadlines, with many meetings and events affecting around the globe. Do you know what your force majeure clause contains and whether it is adequate to deal with storms, hurricanes, volcanoes and other weather events? With weather reports being delivered to inboxes daily, are your attendees more likely to cancel attendance for fear of a projected weather event? Even if you don’t want to cancel the event, is there wiggle room in your force majeure clause to minimize or waive attrition and/or food and beverage minimums.
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Take special care to ensure, as a meeting organizer, you are not similarly being asked in the contract to assume responsibility for responsibilities that clearly rests with the venue or its owner. Other, similar concerns arise when your draft contract contains language that shifts responsibility for damage to the property from the individual attendee to the meeting organizer.
Do you know who owns the venue you have chosen for your event? While a property may have a well-known hotel brand’s name, it may be a franchise, owned by another company. Ensure that ownership of the property is spelled out in your contract and what the property’s obligations are to notify you should the ownership change.
Once a contract is signed, revisit it every year to ensure that things have not changed at the property since the contract was executed. That gorgeous spa you were counting on to wow your attendees may no longer exist. Likewise, monitor your chosen venue to ensure there are no new fees the property has instituted since your contract was signed. A good practice is to ensure the property discloses all mandatory fees at the time of the RFP and a statement included in the contract that no fees can be added or modified without being agreed to in writing.
RELATED STORY: Partnering for successful contract negotiations
One of the newer irritations is the urban destination fee which is not a resort fee but acts like one. A bundle of items such as a specified dollar credit in a restaurant, an internet fee and similar, so-called enhancements are added to the daily room rate—enhancements you may never use but are charged for. Be sure to include a request for disclosure of these fees in your RFP and detailed in your contract as to whether they will be charged and in what amount.
In the end, how successful you are in getting the contract you want depends on establishing a relationship with your venue partner so that both of you work in unison for the success of your event and satisfaction of your attendees. Successful events are founded in successful partnerships between the meeting professional and the venue representative.
Marriott International disturbed the status quo earlier this year by cutting third-party planner commissions by three percent. Other brands followed suit, while some brands refused to do so. Is that a bellwether of other hotel-favorable changes to meeting and event contracts? In a seller’s market, anything could happen. Be vigilant!