Hotel Contracts: Tips When Negotiating Attrition Clauses
Attrition is the difference between the number of sleeping rooms held for a group and the number of rooms actually used. I don't have a problem with attrition fees if a hotel has unused rooms because they were held for a group and then not used, the hotel has been harmed financially. However if a hotel IS able to sell the rooms, then I believe the amount of attrition due should be reduced. This will happen only if explicitly stated in the contract.
In fact, it is important to spell out exactly how the attrition fee will be calculated. Is it calculated per night based on the pick up or is it fee based on a percentage of Total Anticipated Room Revenue? Either way, make sure you do the math so you fully understand what the fee will be.
Recently a group I was working with was required to pay a large attrition fee. The hotel contract allowed for 20% attrition but the group did not pick up the full 80%. They should pay for the difference between 80% and the actual pick up. Seems straight forwarded, right?
Actually it gets a little tricky. The hotel was sold out for some of the nights but did not automatically lower the amount of attrition due. In fact, the only way we knew the hotel was sold out was because some of our attendees were unable to get rooms. This shows why it is important that your attrition clause spells out what will happen when the hotel is able to sell your unused rooms.
Remember, the hotel generates the contract so it is not written to protect you. Be sure to add language covering this to your contract. This must be done before the contract is signed. As John Foster said, If you ask for something before a contract exists it's called negotiating. If you ask for something after the contract is signed it is called begging.
Shelley E. Griffin, CMM, is the founder and president of Griffin Conference Group, which provides comprehensive meeting planning services. She is a respected industry leader who has over twenty years of experience. For more helpful tips see her web site at www.griffinconferencegroup.com