Successful Meetings - March 2010 - (Page 18)

PLANNER’S WORKSHOP meetings law D. Benson Tesdahl, Esq. Falling Room Rates—Friend or Foe? any organizations sign hotel contracts months or years in advance of their meetings. Because history has shown us that inflation tends to make prices go up over time, planners often assume that if they get the hotel to agree that sleeping room rates will not go up by more than some maximum percentage, then the planner has struck a good deal. And many planners also assume that if a hotel will lock in a specific room price years in advance, that is an even better deal. In a roaring economy, when hotel room prices escalate quickly, this kind of contract clause probably is a good deal because it locks in the maximum room price. But we are not in a roaring economy. Sleeping room prices and other meetings-related prices have fallen and will likely continue to fall or at least stay flat for some time to come. If you have a meeting planned long in advance, you may find that you locked in a sleeping room price of $225 per night, only to discover that the hotel’s price for those same rooms has dropped to $175 by the time of your event. If your attendees have any common sense, they will book outside the block and take the cheaper rate. Even if you have locked in a decent rate, there are always cheaper rooms to be found through any number of websites and, sometimes, through the hotel’s site as they try to dump unused rooms at the last minute. If your attendees book those rooms, you may not get credit for them. So as a matter of contract law, what can you do to protect your group in such situations? do not like, is to add a clause after your room rates that reads: “Hotel agrees not to offer a lower room rate on the Internet to any person during Group’s peak nights.” This kind of clause prohibits the hotel from undercutting your prices, but it may also preclude the hotel from dumping unused rooms at the last minute, which hotels like to do whenever possible. Another option, and one that should be used in conjunction with either or both of these clauses, is to ask the hotel to add a clause that obligates it to compare its in-house guest list with your attendance list and give you full credit towards your room block pick-up for anyone who stayed at the hotel, regardless of the price of that room and regardless of when and how it was booked. This kind of clause ensures that you minimize attrition by getting credit for any rooms that your attendees obtained through any source. As long as you only agreed in your contract to fill a certain number of sleeping rooms (as opposed to agreeing to generate a certain amount of room revenue), this can save you from attrition disaster. SM The Savvy Room Block Clause First, after locking in what you believe is the best price possible, you could also ask the hotel to add another sentence after the one containing your room rates that reads: “Notwithstanding the foregoing, Hotel agrees that the room rate charged to Group will be no higher than the rate charged to any other Group using Hotel’s facilities during the period of Group’s event.” Such a clause at least ensures that if another organization comes along and locks in cheaper rates, the hotel has to let your group enjoy the same rates. Another option, which many hotels Ben Tesdahl, Esq. is an attorney concentrating in nonprofit, corporate, tax, and contract law, including meetings and convention law. He is with the law firm of Powers, Pyles, Sutter & Verville, P .C. in Washington, DC. He can be reached at 202-4666550 or at ben.tesdahl@ppsv.com. I SM I March 2010 I SuccessfulMeetings.com Illustration Credit: Chad Crowe http://www.SuccessfulMeetings.com

Table of Contents for the Digital Edition of Successful Meetings - March 2010

Successful Meetings - March 2010
Contents
Editor's Letter
A Dust-Up in the Windy City
Education
Mouth for Sale
Incentive Insights
Management Matters
Meetings Law
Good Neighbor
Feast Not Famine
Spreading Out
Your Guide to Green
Places + Spaces
Houston
New York City
Florida Keys
Oahu
Quebec City

Successful Meetings - March 2010