Can Hotels Cancel Your Comp'ed Rooms?

It feels great to negotiate perks as part of an event contract. 

Comp'ed staff rooms. Free wifi, Discount parking. CONCESSIONS like these can save hosts money and make planners look like rockstars. 

But planners need to know when the venue has a right to revoke Concessions - and when Concessions are "Earned."

What do I mean by "Earned Concessions"?

Earned Concessions are benefits or value-added services venues offer as long as the host fulfills their contract requirements. Earned Concessions typically appear in a contract that includes an ATTRITION clause.

As long as the event host "makes the venue whole" by fulfilling their Attrition obligations, the venue delivers the Concessions. For example, if your Concessions include 10 comp'ed rooms for a 600-night block, the hotel is obligated to provide those comp'ed rooms as long as you fulfill your Attrition obligations.

But some venues include contingency language in their Concession clause - in addition to having an Attrition clause. This is unacceptable. 

Consider the following actual contract language from a Canadian ________:

Hotel will provide the following concessions if at least 90% of the Minimum Guest Room Revenue is received and at least 100% of the Minimum Food & Beverage Revenue is received.

But the hotel had a separate ATTRITION clause!

The hotel's Attrition clause assured the hotel its profit even if the event failed to meet its numbers. The Concession language let the hotel revoke the Concessions despite being made whole through Attrition.

The Concessions clause should have looked like this:

Hotel will provide the following concessions.

This is the difference between Concessions being CONTINGENT on performance and being EARNED based on performance.

If the event host has negotiated Attrition out of the contract or the venue has waived Attrition, it's appropriate to make Concessions subject to performance. Hosts need to meet performance measures to unlock the Concessions. Otherwise, venues would go out of business!

However, if Attrition appears in the contract, the act of paying an "attrition fee" makes the property whole and the concessions become EARNED. Your Concessions, in this case, should not be contingent on your performance.

So the bottom line is this......

When your contract includes an ATTRITION clause, your CONCESSIONS should NOT be discretionary or based on performance. They should automatically be yours!

Know when the hotel can revoke your comp'ed rooms - and when they can't!

Originally published in Planner Protect's e-newsletter February 9, 2017