QUESTIONS YOU MAY BE ASKING YOURSELF:
*How can I limit my attrition liability?
*How do I know the hotel is charging me the correct amount if I owe attrition?
TAKE IT OUT…You will be surprised in this economy that all you have to do is ask. If attrition is a major issue for you, just ask the hotel to take it out. 80% attrition is standard but the verbiage in the contract is vital to your liability.
KNOW YOUR PICKUP HISTORY…Sometimes just having a simple knowledge of your room block and what you have historically picked up year over year will help with this situation. If you don’t have historical room pickup information on your meetings, GET IT!
AUDIT…Make sure you do in internal audit with the hotel to match their in-house guest list with your attendee list to make sure you get full credit for all of your attendees staying in the hotel. Internet reservations and miscoding on group reservations is a great way to find additional room nights.
MAKE SURE IT IS BASED ON ROOMS PROFIT…Make sure that your attrition clause notes that attrition will be paid on the rooms profit which is typically 80% of the group room rate. So if you had a $100 group rate, you would only pay attrition on an $80 rate.
GREAT CONTRACTUAL CLAUSE TO USE
GUEST ROOM MINIMUM
The original room block outlined in the agreement is an estimate only based on the history of previous meetings held and not for purposes of a guarantee by Group. The original room block shall be reviewed by Group and the Hotel and adjusted by Group, if necessary, without liability on specified adjustments dates.
Group will use its best efforts to offer and promote the use of the Hotel to its members for rooms; it reserves the right to adjust this block according to the guidelines outlined in this provision. These guidelines have been established to allow the Hotel to receive realistic figures and ample notice in order to maximize its inventory.
o The First Review Date shall be three (3) months prior (INSERT DATE). On or before the date, the Client shall have the right to reduce the first adjusted room block by 10% without liability. The room block established on this date shall be known as the first adjusted room block.
o The Second Review Date shall be one (1) month prior (INSERT DATE). On or before the date Group shall have the right to reduce the first adjusted room block by 5% without liability. The room block established on this date shall be known as the second adjusted room block.
o The Third Review Date shall be 21 days prior (INSERT DATE). On or before this date Group shall have the right to reduce the second adjusted room block by 5% without liability. The room block established on this date shall be known as the Final Room Block.
Damages to Hotel – Should the actual number of room nights used by Group decrease from the Final Room Block by more than 20%, the Hotel shall be due damages, subject to the Hotel’s duty to mitigate damages, outlined below. Damages shall be calculated by multiply the lowest negotiated single room Group rate (excluding sales tax and service charges) times the hotel’s profit margin of 80% on sleeping rooms, times the difference in the actual number of room nights used at the Hotel by the Group and the number of room nights confirmed as the Final Room Block, less 20%.