While signing a hotel room block contract may seem simple, trouble begins when fewer people attend than expected. Sudden debt incurred by booking rooms that were not used by anyone becomes an unwelcome surprise for the organizer. In a highly popular destination such as New York City, the monetary losses can be severe.
Below are all the details on what an attrition clause means and how to protect yourself before you sign anything.
- The Meaning of an Attrition Clause
Attrition is a clause in the contract stipulating that the event organizer is required to pay for any losses if the event group fails to book a minimum percentage of the reserved room block. For hotels for large groups NYC generally requires that the room booking is not lower than 80 to 90 percent of the booked amount.
In case your group fails to use more than 80-90 percent of booked room nights, the hotel requires the remaining amount to be paid based on the previously agreed group rate.
- The Problem of the Cutoff Date
In all room blocks, there is always a cutoff date that is usually set at 30 days prior to the start of the event. What most event planners fail to note is the fact that once the cutoff date passes, any room that has not been blocked by the event planner is released by the hotel into general availability, but the event organizer must still pay the attrition charge for these rooms.
These rooms get booked by other clients, and the hotel receives payment for their use; at the same time, it gets an attrition charge from the event organizer. This happens frequently in places like New York, where hotels receive bookings throughout the year.
- Tips to Negotiate the Best Terms on Attrition
- Get a smaller block. Plan to book low and negotiate an addendum giving you the option to add to your rooms if attendance exceeds the estimate. You will automatically reduce your exposure to attrition penalties through a smaller number of rooms initially committed.
- Get a reduced percentage for attrition. An 80-90% threshold should not be used as the standard for negotiating your percentage, especially if your event takes place during the low season. Ask for 70-75% attrition for hotels that are less busy on your dates.
- Insist on a re-sell clause. Ensure that any late bookings on individual rooms made at a property are counted toward your group before determining the attrition penalty. Some of the best hotels for groups NYC will provide this upon request during negotiations.
- Determine how the attrition percentage is calculated. While some contracts have a cumulative clause that considers total rooms per stay for the event, others consider the attrition on a nightly basis. This can result in a significantly higher penalty if attendance varies across multiple days.
How Best Venues New York Protects Clients on Room Block Contracts
It takes expertise in understanding hotel contracts and the market environment, which clients generally gain only through experience and costly mistakes. The process of negotiating the room block is done by Best Venues New York free of charge on behalf of their clients.
Best Venues New York negotiates attrition rates, re-sell terms, cutoff dates, and penalties associated with room block contracts with many hotels. Best Venues knows what hotels have the best attrition terms and which room block contracts are the riskiest when it comes to variable group attendance.
Any organization planning a corporate event in conjunction with securing group hotel rooms will need help from Best Venues New York with all aspects of the process.
