Hotel Negotiations –
Contracts: Tips and
We just pass the time in our hotel rooms
And wander 'round backstage
Till those lights come up and we hear that crowd
And we remember why we came
--Jackson Browne, Running on Empty, 1977
Tom Pasha, CONTACT Planning
Improve Your Booking and
You Can Improve Your Deal…
Be Flexible to Get hotels to
compete for your business
Check alternate patterns
Rooms and Meeting Space match
Rooms match History
Stack pre- and post events;
Book shoulder times instead of peak
Book Banquet events– call sponsors and
Measure and Report your group’s
amenity use: Golf, Spa, Casino, Outlets
Negotiating Strategy to have
hotels compete for your business
Present all your requests and requirements; don’t hold back
Have your group history handy – know the value of your
business for a good deal;
Tell the sales manager your priorities– space, location, etc.
Know your price comfort level– tell your sales manager
See if there are other divisions in your group who are also
meeting -- you might bundle with your meeting to get a better
If an option, negotiate to book a multi-year series with the hotel;
be sure to add a “based on the successful completion of the
year prior” clause.
Hotels Contracts Confirm….
Dates, Rates and Space
Payment and Billing
Attrition and Cancellation
Standard Hotel Policies
Negotiating Starts With
Ask the Sales Manager which date can
deliver the best deal – it really works!
Sunday Arrivals, dates before and after
holidays; overlapping city-wide conventions;
Check to see if you can meet the same
pattern the week before or after the preferred
See if you can stack events to minimize the
“shoulders” on the block; a clean booking has
higher value to the hotel.
Much more than Room Rates!
Be sure to Contract…
Room Rates (Sgl /dbl / trip / quad)
Suites Rates (1, 2-bdrm suites?)
Comp rooms: 1/40, 1/45, 1/50?)
Resort Fees (PP or Per Room?)
Internet access fees: Room and Mtg
Parking Fees (Staff price / Comps?)
Porterage Fees (Optional?)
Housekeeping Fees (Optional?)
A Space Odyssey
Check the contract and Program
Addendum for space items:
Day, Date, Time (Matches?)
Show all set-up and tear-down days;
General Session & Breakouts sets shown
Set-up and turn-times shown
Breaks and meals (Bkfst vs Cont. bkfst;
roll-in lunch; buffets, etc.)
Location and Room names, or guarantee
the square footage.
After the Room Block and Rate information, Concessions are next.
Bullet-point format, include Comps, Upgrades, VIP’s, etc.
1 per 40 comp room credit, calculated on a cumulative basis;
Three VIP upgrades to Junior Suites at the Group Rate for the duration of
One (1) two-bedroom VIP suite complimentary for the duration of the
Complimentary wireless internet in all guest rooms;
Complimentary wireless internet in all meeting rooms;
Complimentary meeting space, based on the program and pick-up; (OR)
Complimentary meeting space, based on a Catering minimum of: $_______
Complimentary Health Club Fitness Center for all attendees
10% - 20% off Audio Visual
10% - 20% off Catered F&B
Additional guest rooms will be accepted at group rate based on space
Group rate extended three days pre and post, based on availability.
Reservation Method: Individual,
Rooming List, Housing Bureau
Rooming List Due date-Cut-off
Room Block Review Date: 10% or
20%, 3 to 6 months prior to Cut-off,
not Event Date.
Rooms received after Cut-off should
be based on room availability at the
Group Rate, not Available Rate
Rates available 3 days pre- and
post-meeting dates, space available
Payment and Billing
Billing: Master Account:
All Charges to Master
M/A Room & Tax, Ind. Incidentals
GTD to corp; Individual Payment
Master Account Catering,
Specified Staff Charges, per
Payment: Pre-payment / Payment;
Credit Card Authorization; Credit
Special Forms: Purchase Orders,
W-9, Separate Invoice for every
#1 STRATEGY: AVOID
Attrition and Cancellation….
Book a group when you’re sure it is happening.
Request an extended decision date, if you’re not
sure; hotels can hold a First Option, if needed
Contracts should have a sliding scale of
cancellation dates; the penalty increases as the
cancellation date approaches the event date.
Tell the hotel if it’s a first time booking, a seminar,
or a promotional block; ask for a Courtesy or “No
Minimums and Attrition
Negotiate and contract Rooms minimum at
80% of the block.
Contract a Resell clause, so the hotel can
re-sell the released space, and you’ll pay for
what was not sold;
Contract a Re-book clause, so any
Cancellation or Attrition fees are applied
100% to your next contracted date;
Whenever possible, any attrition or
cancellation penalty based on Rooms profit,
of 80%, Not Retail.
F&B Minimums and Attrition
Base the F&B minimum on your selected
menu, not on the “Average Check” assigned
by the hotel.
Contract the minimum at 80% of your spend
Contract to pay any F&B attrition based on the
anticipated profit of the Catered F&B, at 40%,
Negotiate to have the F&B minimum include
Tax + Service Charge
Remember that meeting room rental is quoted,
but normally is subject to Tax + Service
Charge – that can be an added 30%.
Negotiate it with the final figure in mind.
Negotiate Hospitality catering to be applied to
your F&B minimum;
Most hotels have a version of this in their contracts;
they will add it if requested;
If you are liable for a cancellation, ask for the hotel’s
Daily Report or Flash Report for those days. Ask the
hotel to compare it to their Annual Forecast for the
cancelled days, to see if they were actually affected.
Pay for the difference between the estimated revenue
and the forecasted revenue @ anticipated Rooms profit
of 80%, not the 100% retail.
Most hotels also have this clause available, but you
need to request it.
If you are able to re-book the same meeting within 6-12
months of the cancelled dates, you should have the
cancellation fee applied as a credit for the new dates.
Ask for 100% of the prepayment to be applied,
sometimes you’ll get it, and others may be 25%, 50%
Again, make sure it is clearly spelled out in the
contract, before anyone signs anything!
Make sure everyone signs and counter-signs
Attrition Clause Samples
This Agreement is based on Group’s use of the guestroom block as
outlined above. However, thirty (30) days or more, prior to the first
day of arrival, Group may reduce its guestroom block by a maximum
of 10% cumulative. No payment shall be due, however, for
any night during the Group stay in which the Rooms
Revenue meets or exceeds the Rooms Revenue as
forecasted in the hotel’s Annual Budget.
In the event any attrition charges are posted to the Master Account
for the above group, the entire amount will be applied as a credit
towards any rebooking of this group within 12 months following the
departure of this contracted event.
Contract Clauses to
Construction or Renovation.
Hotel acknowledges and agrees that there shall be no planned or scheduled alterations
construction or renovations during the period of the meeting. For any renovations
that would impact the successful completion of this event, the Group will
have the option of postponing the scheduled event on a space available
basis or cancelling the event at the hotel without penalty.
The foregoing Agreement, set forth the entire understanding between the parties hereto
and supersedes all prior agreements, arrangements, and communications, whether
oral or written, with respect to the subject matter hereof. This Agreement may not be
modified or amended except by the mutual and prior written consent of both parties.
No additional Rental Fees, Minimums or other charges not specifically
set forth in this contract can be added at a later date, without mutual
agreement by both parties.
It is agreed that in execution of this contract, in the event of a problem in facilities or
service, the client will clearly identify the issue to the sales and convention service
manager assigned; the hotel will have the opportunity to remedy the situation. In the
event that the proposed remedy is not mutually agreed upon as resolving the issue,
the client reserves the right to negotiate appropriate and proportionate adjustments
to the Master Account.
Catering, in-house electrical service and rigging are exclusive services provided by the
hotel. For all other services, including audio-visual, staging, DMC or other services, the
in-house vendor is invited to submit a competitive bid. If an outside vendor is selected,
the hotel agrees to waive any service fees or patch fees. Standard electrical service
will be provided at no cost. Standard and reasonable licensing and insurance may
be required from any outside vendors.
And Even More Clauses…!
Each party to this Agreement shall, to the extent not covered by the indemnified party’s
insurance, indemnify, defend, and hold harmless the other party and its officers, directors,
agents, employees, and owners from and against any and all demands, claims, damages to
persons or property, losses, and liabilities, including reasonable attorneys’ fees (collectively,
“Claims”), arising solely out of or solely caused by the indemnifying party’s negligence or willful
misconduct in connection with the services contemplated by this Agreement. This paragraph
shall not waive any statutory limitations of liability available to either party nor shall it waive any
defenses either party may have with respect to any Claim.
If ABC Corp cancels the meeting, it will pay the liquidated damages as agreed based on the
preceding scale above and within the time period outlined. Should ABC cancel the meeting
liquidates damages are due within (30) days after cancellation. The Hotel, after utilizing all
rooms in its inventory not part of the ABC room block, will undertake all reasonable efforts to
resell the ABC rooms in the room block not utilized and reasonably demonstrate such actions to
ABC. Hotel will furnish to ABC upon request its Occupancy Analysis Report (OAR) to
substantiate actual room night utilization. ABC will receive a refund in the amount of any
resold rooms revenue within (30) days after contracted event end date.
Ready to Sign the
NOT YET!! Double-check everything! It’s a real
document… (VERY real sometimes!)
Make any changes before you sign the final contract; once
it’s signed, it’s done.
“Line-outs” are legal– date and initial any changes; hotel to
For major changes, request a re-write;
Sign, date and scan or fax-return the contract, have the
hotel send you a countersigned copy.
Always make sure you receive a counter-signed copy–
hotel people are always getting transferred, so you want to
make sure everything is protected correctly.
And, as always……
Call me if I can help!
“ And still those voices are calling from far away,
Wake you up in the middle of the night, just to hear them say,
Welcome to the Hotel California.”
-- The Eagles, Hotel California, 1979