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Biggest issue Used to be rate protection Used to be negotiation of amounts due Now: Customer simply unable to pay
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Who I am and What I do
• Tell me about you• Planners?• Hoteliers?• Others?
Biggest issue
• Used to be rate protection
• Used to be negotiation of amounts due
• Now:• Customer simply
unable to pay
Is the economic downturn a Force Majeure?
• Short answer:• NO
• Key elements of Force Majeure:– Unexpected event– Makes contract
illegal or impossible
Economic changes are not unexpected
Don’t make it illegal or impossible
What about H1N1?• Remember the two
elements:• Unexpected• Makes contract illegal
or impossible
• Most contracts contemplate that people may not come (Attrition)
• Not illegal or impossible unless quarantined
• Seasonal flu kills 35,00 annually
What about Bailouts and TARP?• • No government
prohibition YET• Laws require
regulations to be adopted to prohibit UNREASONABLE spending
• Law does not clarify what is to happen to contracts already in place
So what to do?• ASK for help; don’t DEMAND it.• Tell the hotel immediately, don’t wait. Lead time is
critical. • Be prepared to return proportionate function
space so the hotel can attempt to sell your inventory.
• Determine how much available inventory the hotel has prior to selling your rooms. Explore E solutions using opaque channels.
• Negotiate with hotel on any revenues you may be generating above those contracted to help reduce attrition exposure, i.e. catering.
• Make the convention bureau and national sales network aware of the available rooms.
Common Contracting Mistakes• Using contract and addendum• Failing to do proper amendments• Failing to read and apply the contract!
Common Mistakes, continued• “No Attrition” contracts• Under blocking/Intentional overbooking• Asking hotel to assume all risk
• BETTER:• Limit attrition or have release dates• Share risk of outside issues• Shorter term bookings• Consider no booking!
