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Contracts – What You Need to Know…part 1

Monday, May 13, 2019

Hotel Clauses for contracts for Corporate Events

Let’s chat about contracts, specifically hotel contracts.  In this new office hours series, we’re going to be chatting about all things corporate events.

Contracts are important, obviously.  But how do you know what is most important?

Well, there are standard clauses that you need to have in all your contracts.

  1. Food & Beverage performance policy. This is where they talk about your F&B minimum.
  2. Guest Room performance policy. This is where they talk about attrition. FYI – attrition could be a stand alone clauses as well – just make sure it’s in your contract.
  3. Cut-off date.This is where they tell you when your reservations or rooming list are due.  This is a very important date to remember.
  4. Function Space outline. Make sure all your space is accounted for that you are requesting andthe time that you need the space.  Don’t forget to add time for set-up and tear down. 😉
  5. Payment schedule. It’s important to know when deposits are due. 
  6. Cancellation. This is where they tell you, if you cancel this program, the company will be liable and have to pay x amount. 
  7. Impossibility AKA Force Majuere. This clauses allows both parties to terminate the contract with no penalty if there is an act of God, war, terrorism, etc. Be sure to read this post.
  8. Acceptance date. When you need to sign the contract by.

There are more contract clauses and some are specific to the hotel you are working with.

You also want to make sure all your concessions are noted in the contract.  You might ask – how do I know what concessions to ask for?  As a rule of thumb, I want to know the audience before I pull together a list to give to my sales manager. I also want to know what’s important to the client. And another note – is this a first time event for this client.

KNOW THE AUDIENCE

Is this a high tech group? Well internet is going to be important.  I for sure want it comped in the guest rooms and I will ask for it comped in the meeting space.  Hotels look at internet now as an additional revenue stream so this can be a negotiatingfor you when you are comparing hotels before you go to contract.

Will there be a lot of locals or will the majority of people be flying in?If it’s local, then ask for complimentary parking or discounted parking.

WHAT’S IMPORTANT TO THE CLIENT

So what is important to the client?

Do they want a discount on their food & beverage?  If the program is next year, do they want to use current menu pricing?  Menu pricing typically goes up year over year.

Do they want complimentary room rental?

How about attrition?

Are they going to be shipping a lot of boxes?  What is the box policy at the hotel, do they charge?

Let’s talk internet again.  This is always a hot topic and something that is ALWAYS negotiable.

IS THIS A FIRST TIME EXTERNALEVENT?

And why does that matter?  Because some hotels like to say that you can have all these concessions IF you meet the F&B minimum AND the room block minimum. If this is a first time event, I NEVER tie the room block with the concessions. It’s always our hope that the client will pick up their room block, but when it’s an external event, they’re inviting people, they’re charging people, it’s a crap shoot in a way.  You have to make educated guesses on what the attendance is going to be like.  Also the client needs to understand where the audience is coming from.

I hope you like this topic because there will be more posts coming.  Is there anything specific you want to know about hotel contracts?  Also if there are any other topics you would be interested in learning about during office hours, leave a comment.


Are you interested in Corporate Events?

Did you know that we have an e-course that’s perfect for those wanting to get into the corporate events world? We just closed the doors to the course, but will reopening them soon.  Be sure to sign up to join our wait list.

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