Your contract with a hotel is the only guarantee you have that you’ll receive what you expect and for the price you’ve agreed to pay. It’s the only document that details all the costs you’ll pay under any circumstances. Failing to review a contract completely and efficiently can be a costly mistake, but actually sitting down to do it can be quite overwhelming. But careful, informed contract review is important because it can save you from spending unnecessary money or from being charged unfairly. Convene recently asked Robin Roth, senior contracts editor for Conferon, Inc., to provide some insight for meeting planners about how to conduct the review process. Here’s what she had to say.

Convene: When a contract arrives on your desk, what specific steps do you take in reviewing it?

Roth: Reviewing a group sales hotel contract can be time-consuming and confusing. If you are a meeting sponsor, you seek a fair agreement that accurately and comprehensively covers your meeting arrangements. When you receive the contract from the hotel, you must closely examine a document that is often one-sided in favor of the hotel, vague in many places, sprinkled with errors and typos, contradictory, and missing essential language. It is helpful to examine the contract twice. First, look at everything that is there and identify the terms that need to be rewritten, changed, or deleted. Second, look at the contract again for what is not there that needs to be added.

Convene: How do you deal with vagueness in a contract?

Roth: Surprises are not welcome once a customer has signed a group sales contract with a hotel. Contract language should be as clear and specific as possible so that both parties know exactly what terms they have agreed to. The group should not be faced with unexpected charges, have a different understanding of how future rates are to be calculated, or arrive at figures for attrition or cancellation charges that are poles apart from the hotel’s. They shouldn’t even debate whether there is attrition in the contract in the first place! The planner should check each term of the contract to be sure that all items have been clearly spelled out. Legalese that isn’t understandable should be rewritten in plain language that is clear to both parties. It is helpful to beware of words and phrases like "reasonable," "at the hotel’s discretion," and "meeting room rental may (vs. will) apply."
Concession terms provide an elementary example of how to avoid being vague. These terms should state whether the concession is complimentary or upgraded at the group rate, state for how many nights the concession is offered, and be specific in detail such as "four complimentary round-trip airport transfers" or "four complimentary welcome VIP amenities." Also, if concessions are tied to pickup (usually 80 percent), most contracts just state that the concessions will be renegotiated. Rather than leave the issue open, the contract should state exactly how the concessions would be affected in the event of a shortfall. For example, if the hotel were to provide one complimentary one-bedroom suite, the contract could state that if less than 80 percent of the room block was picked up, the suite would be provided at the group rate.

Convene: How much negotiation and willingness to make changes do you usually expect from a hotel property?

Roth: On business issues, most hotels are empowered and willing to negotiate. These areas often include rates, dates, space, concessions, room rental, service ratios, etc. Negotiations can be more difficult when you are requesting material changes to the legalese or the liabilities associated with the booking. Many hotel sales personnel need to refer requested changes to clauses such as Force Majeure, arbitration, or indemnification back to their corporate legal departments. If you request changes to the liability issues (such as attrition and cancellation), your requests can often send up red flags to hotels. Requesting a better cancellation clause can be interpreted to mean that you may have a higher risk of canceling. Requesting improved terms of attrition can be interpreted to mean that you are unsure of your ability to pick up the block.

Convene: Do you have any specific advice or tips to remember for new meeting planners reviewing their first contracts?

Roth: Reviewing a first contract can be an overwhelming experience for a new meeting planner. There is a great deal of information covered, and the subject areas may be overlapping or even combined. This makes it difficult to ensure that each topic is clearly and accurately covered. A rule of thumb is that each important topic in the contract should be covered separately under its own clause. For room block performance there should be only one clause, usually attrition or a meeting room rental sliding scale tied to room block performance. Make sure that room block performance is not tied to another major area like food and beverage performance or cancellation. Also make sure that if there is no room block performance that it is so stated in the contract. Cancellation should also be a separate clause — a sliding scale based on date of cancellation and with just a percentage of room revenue as the charge, not including other forms of revenue.

Note: This information is not intended to be legal advice. A qualified attorney should be consulted to review all contract issues.