3 Crafty Clauses to Look for in Hotel Contracts
September 17, 2014

We’ve all been there, stuck on a deadline with the event fast approaching and you need to quickly book bedrooms for your staff and speakers in a nearby Hotel. You’ve visited the Hotel and met with the Sales Manager to discuss your needs and you have agreed on a rate. All you need to do now is sign the contract and you can go back to focussing on your event.

But wait!

Not all Hotel Contracts are the same, and whilst you met and agreed with the terms of your booking with Sales Manager at the Hotel, the contract is often a generic document that is sent out to anyone who books a group at their Hotel. So here are the three “Crafty Clauses” that are often found in Hotel contracts that you need to watch out for:

Rate Change Policy.

Whilst you’ve agreed a rate and a number of bedrooms with the Hotel, your requirements might change. This might mean that less staff stay the night prior to the Conference than you initially thought. Make sure to begin with that there is some flex from the Hotel in their cancellation policy, then check for a “Rate Change” policy within the Cancellation Section.

What this often means is if you cancel a % of rooms nights, then the Hotel can review its rates. Whilst we agree that the Hotel does need a degree of protection if it is offering a discounted rate, make sure this is fair for both parties and allows you to make alterations to a couple of bookings without massively effecting the rate the rest for the rest of your bookings.

Cancellation Compensation (Attrition)

A mainly American Policy that has crept into a number of 5 Star Hotel Policies in London recently. Attrition is a term that in a very brief way, means that on top of the cancellation fee from your Hotel they also have the right to charge loss of profit on what the venue would have expected to have made from Food, Drinks and incidentals. Our advice is to try and negotiate this out of your contract, however if you are dealing with a Hotel in America/Asia this is unlikely.

Payment Schedule

If you don’t have credit with your hotel, double check the contract payment terms. Some Hotels now ask for 100% of the cost of the booking once the contract is signed. If you are paying for your Hotels through the cashflow of the event we suggest that no more than 10% of the Total booking should be paid as a deposit. However due to risk adverse Hotels watching their own cashflow, some are now demanding 100% as soon as the ink is dry on the contract.

If you have any doubts about the terms of the contract, or if you are not happy with what is written then do not sign it. Its always important to remember that a contract is a legal document that once signed holds you accountable to the agreements that are written within it. Often you will hear the Hotel advise that “they never enforce” a particular contract term, if thats the case then it should never be a problem to remove it.

Have you had a bad experience with a Hotel Contract? Tweet us your story @innov8_conf using the hashtag #craftyclauses