By Michael M. McCurry, CMP — Experient
In April, Experient hosted three Meetings and Events industry forums in Chicago, St. Louis and Washington DC. Experient team members, as well as prominent association and corporate executives met to discuss and brainstorm hot industry topics. This is the third in a three part series of articles recapping the highlights of those events.
Coinciding with renegotiation of a hotel contract is the sometimes painful topic of attrition. In these tough economic times room block performance has become a pervasive issue with most organizations hosting meetings and events.
Thinking creatively and acting proactively is paramount to alleviating, or at the very least minimizing attrition risk. The following are some suggested techniques for addressing this issue.
- Mitigation Clause — Make certain you get credit for “re-sold rooms”. If your hotel contract does not contain a provision crediting your organization for room nights resold by the hotel request that it be added to it.
- Attrition Buyout — If you are certain your event will have an attrition expense then offer an early payment in exchange for a reduction to the liability. For example if you believe you will owe $100K, negotiate to pay a smaller amount (i.e. $50K) several months in advance. The hotel deposits the funds earning interest on them, and enhancing their cash flow.