Event Cancellation & Event Postponement 

Build up your cancellation clauses so they protect you. This is CRITICAL! And yes, you should have a cancellation clause! If your contract has specific numbers such as $74,239 be sure you know exactly how that number was determined (ask for this to be spelled out in the contract), so that you can be fully prepared. We have had instances where we checked the math before and found it to be incorrect!  When building up your event cancellation or event postponement clauses, the other elements to consider include:

• Is there a sliding scale so that event cancellation charges change depending on how close you are to the actual date of the event?
• If the event can change dates, can some or all of the cancellation charges be put towards new dates?
• Is there a part performance element or options to reduce your commitments? (This seems like it could also be a holdover from previous days when you could still hold your meeting, but only some of your attendees could get there. That would allow you to reduce your guest rooms and food and beverage spending without cancelling your event.)
• Is there a way to get credit if the hotel is able to resell the meeting space or guest rooms?
• Is the situation included in your clause of the hotel closing or the event on the group cancelling?

Grimes also writes in his article that when it comes time to reevaluate holding events and meetings with the Coronavirus outbreak, that it is necessary to consider all of the options. He states, “some groups are able to negotiate a reduced-size meeting; others that cannot meet now have agreed to postpone their meeting for several months, with cancellation damages waived in whole or in part so long as the rescheduled event goes forward.” But as he also states, “…this is an evolving situation.” With what is happening currently, remember that we haven’t been through anything like this, so being open to discussions are essential to moving forward.

Attrition Clauses

Attrition clauses determine how many hotel rooms (or a percentage of) that must be used in order to avoid paying a penalty. An example may be that you’ve agreed to take 100 guest rooms in total and your contract states that you agree to take 80% of those. Ask for a formula to determine your attrition so that you are obligated to a number if things change along the way. One other thing we always like to remind people planning events is to not accept a standard attrition clause without boosting it up for further protection. Some ideas include:

• Reduce the % of rooms you are required to pick
  (Can you negotiate it to be fewer?)
• Have the contract state that any additional rooms you are required to pay for are at the rate for a single room
  (So you aren’t paying for suites that aren’t booked)
• Include all pre and post stays, cancellation fees and staff rooms in the number of rooms that are calculated for your pick up
• Clarify if the pick-up is based on a day or cumulative
  (This way you don’t pick up all the rooms on Monday, but take more than originally requested on Tuesday – are you meeting your agreement?)
• Make sure that if the hotel sells out, you aren’t on the hook for rooms that they’ve re-sold
  (Meaning that your group didn’t take all the guest rooms you thought you would, but the hotel sold them to other people. It’s like you paid for a glass of milk, but didn’t drink it and then the hotel sold the glass of milk to someone else who also paid for it.)
• Look for dates that you might be able to change your attrition clauses
  (Especially in times of uncertainty, we never really know how many people will come to the events. Can you negotiate times when you can re-visit your numbers and potentially change this clause?)