Attrition and Cancellation Assistance

From time to time, an organization will find itself in the unenviable position of having to cancel a scheduled meeting due to circumstances beyond its control. Or, it may find that the expected attendance for a meeting will fall short, causing contracted rooms to be left unused. In either case this type of cancellation or attrition contractually requires the organization to pay penalty fees. Once that point has been reached the options left for a planner to reduce or eliminate these penalties are limited. On the following pages are some strategies that can be employed to take care of an existing problem or at the very least make sure one doesn't arrive in the future. Some of these concepts can be applied to both attrition and cancellation situations and some are situation specific. Depending on circumstances, you'll have to decide what works best for you.

Attrition

Before Contract is Signed

The best way to address attrition problems is to do it before a contract is signed. When negotiating a contract here are some approaches you may want to consider.

1. Ask for no attrition clause at all. Hotels are more amenable to this than might be thought. You just have to ask. However, it is not just enough to have no attrition clause - the clause must state that there will be no penalties for attrition.

2. If the hotel insists on an attrition clause ask for a larger percentage. If they offer 10% ask for 20%. If they offer 20% ask for 30%, etc.

3. Make sure that there is "last room sold" phrasing in the clause. This is sometimes referred to as a "re-sell" clause. Essentially what this phrase means is that any attrition penalties that are incurred will only be applied if the hotel is not sold out. For example, if you exceed your allowed attrition by 10% on a 100 room block, you would be responsible for 10 rooms. However, if the hotel had only five empty rooms on the nights in question then they have successfully re-sold five of your rooms and you should not pay any penalty for those rooms.

4. Get verbiage in the contract that states rooms will be credited to your room block no matter what method was used to make the reservation and no matter what rate was quoted for that reservation. Reservations are made in all kinds of ways including some that extend beyond your stated method of reservations. For example, you may have a $150 rate for your group.

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