Hotel & Motel Management - October 1, 2007 - (Page 10)

10 Sales Clinic IN THE details Writing rate contracts Collect after default Talk dollars and cents Make sure it’s in writing H&MM October 1, 2007 | HotelMotel.com www.HotelMotel.com/digital_edition Attrition clauses help protect hotel assets W By Howard Feiertag H&MM Columnist e have covered this subject in a limited way in previous columns, but there is always something new to learn about protecting your property’s assets. Attrition still seems to be the number one concern for meeting planners who are trying to have the contract written in their best interests. It is important that hotel contracts written by the sales staff manage the wording of the attrition clause to make sure the properties’ best interests are covered. The idea is to be sure that all the revenue due to a property as a result of a group event is collected if the group defaults in fulﬁlling the contract. The attrition clause in the contract addresses the issue of how any amounts due should be computed for collection. If the contract reﬂects that the group has guaranteed a room block of 100 rooms to be used each day, at a certain rate, and only 75 rooms have been used, the attrition clause spells out how much the property should collect for the 25 rooms per day “If anybody can tell you how to control energy bills, it’s me.” “My guests are always opening the windows to look at the ocean, so I need to do everything I can to keep my energy bills low,” says Marcus Lewis, Vice President of Development, Tidewater Hotels & Resorts. “That’s one reason I use only GE Zoneline® units in all nine of our oceanfront properties. They help keep rooms comfortable, are very quiet and help me control energy costs…even if I can’t control my guests’ behavior.” GE Zoneline®, the most efﬁcient line of package terminal air conditioners and heat pumps in the industry not used. Although some planners have been successful at negotiating fees due based on percentages of actual rate, or percentages of the block not used, make sure whatever method used is reﬂected in dollar amount. When computing amounts due for other contracted items not used, such as meeting space, food and beverage, audio-visual equipment, exhibit space, etc., the amounts due should be reﬂected in dollars. With most group contracts, we see attrition fees calculated on the total number of room nights used during the period of the event. Planners need to make the computation on the number of rooms picked up from the block on a daily basis. If the agreement reﬂects that 100 rooms were blocked for each day of the meeting, and if on the ﬁrst day only 80 rooms were used, then the hotel is due the agreed amount for the 20 rooms not used. The fact that the group uses 120 rooms the next day does not mean they will get credit for the extra 20 rooms to cover what was not used the previous day. This could be a critical subject to cover when negotiating how an attrition clause is written. Another area to consider within the clause is that any rooms booked by a group at rates lower than the speciﬁed amount are not counted as part of the block of rooms guaranteed by the group. Sometimes, group attendees have the ability to seek out lower-rated rooms at the property via a third-party Internet provider. Also, there should always be a cut-off date, which would allow the group to reduce, or even increase, the guaranteed block of rooms in advance. In the event there is a change agreed upon by both parties, it should be in writing, signed by both parties, as an amendment to the contract. hmm@questex.com Howard Feiertag is on the faculty of the Department of Hospitality and Tourism Management at Virginia Polytechnic Institute, Blacksburg, Va. He can be reached at howardf@vt.edu. CIRCLE NO. 118 http://HotelMotel.com http://www.HotelMotel.com/digital_edition

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Hotel & Motel Management - October 1, 2007 Contents Independents Rely on Guest Feedback Models Showcase Aloft, Element Brands Trainers Emphasize Communication, Cooperation Perspective At Your Risk Satisfaction Trends Sales Clinic Energy Star Update HotelWorld Update Trends & Stats Dressing Walls in 'Green' Music Programming Provides a Sound Solution Remote Check-In/Out for Leisure Travelers Q&A: Western U.S. Pipeline Softgoods - Beds and Bedding Transactions A Cause Célèbre Awards People on the Move Events Cleaning and Maintenance Solutions Marketplace Ad/Editorial Index Classifieds Checking Out

Hotel & Motel Management - October 1, 2007

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