When signing your contract for either the Conference Venue or Hotel for your event, how closely do you read the fine print? How much do you understand the contractual terms that are in the agreement that you have signed up to?
We’re here to give our Top 5 Contract Tips to make sure you don’t get stung with high fees or stipulations that make it harder for your event to be successful.
1. Minimum Numbers
Whenever you sign a contract which includes catering or a Day Delegate Rate at a venue you will normally see a stipulation stating “Contracted Minimum Numbers”. More often venues will try and set this as your projected numbers for your event, however this should be your worst case scenario. If the venue won’t agree to lower the minimum numbers on the contract, take the safe option and move your event to another venue. There are plenty of reasons why an event can under-perform in attracting attendees, and minimum number contracts can leave you stuck with a loss making event.
If you are holding an event with an expected 200 delegates attending, ensure your minimum numbers is no more than 150.
2. Access/ Setup Times
How much time do you need to setup at a venue, and does the venue provide enough time for your team to get in, setup and then breakdown afterwards.
It’s fairly easy to misunderstand that full day usage doesn’t always mean that you get access to the venue whenever you want. Make sure before you sign the contract that there is enough time in your tenancy to get your event prepared before all the delegates arrive. Conference venues will often book events back to back, therefore if you are holding an event for only part of a day, make sure you know whether someone is using the rooms you have booked and what time they are expected to leave.
3. Payment Schedule
Not every Conference Venue or Hotel will have the same contracted payment schedule, and there are really no wrong payment schedules. You do, however, have to ensure that the payment schedule matches your registration/ exhibition sales timeline. The best events will require very little capital investment and can pay for their venue, Hotel and suppliers through the cash flow of registrations.
Take the time to check the payment schedule and if any dates look like they may concern you then contact the venue to see if they can be more flexible.
4. Is VAT/ Taxes included?
Sounds simple right? Wrong. Checking VAT and taxes are included in rates is the most common contract mistake in events. 20% VAT is the difference between getting a great rate and a really bad rate at a venue. Whats more certain items are non-vat-able, so ensure your venue provides a thorough breakdown in their quote of what does or doesn’t include VAT.
Tip from Emma Caldwell (Co-Owner at innov8 Conference Services)
“We recently re-negotiated a Hotel Contract for a large Conference in London, and was able to match the previous years rate, but included VAT instead of in the past where it had been excluded. The results was a £22,000 saving to the client on just one group hotel contract, VAT and Taxes can make a huge difference.
5. Cancellation Compensation (Attrition)
Not a common UK contract term, its mainly stemmed from America and Asia where Attrition is common in most large event contracts. Attrition is a term that in a very brief way, means that on top of the cancellation fee from your venue 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 venue in America this is unlikely.
Due to unforseen circumstances you are forced to cancel a three day residential Conference. The Hotel has already charged you a 75% cancellation fee on all bedrooms and meeting space but also has a £20 per day attrition rate per delegate based on expected Food and Drink spend.
This would add between £9,000 – £12,000 of additional charges onto your cancellation fees.
Confused by contracts, don’t worry most organisers can make mistakes, at innov8 Conference Services we work with a large number of Conference and Events across the World. This allows us to negotiate better rates and contracts at venues by grouping this buying power together under ourselves, contact our team to find out more.