Negotiating a Hotel Contract

Reviewing and negotiating a hotel contract can be time-consuming, confusing, and down-right frustrating. You are seeking a fair agreement that accurately and comprehensively covers your meeting arrangements, keeps financial risk to a minimum, and protects your company assets. Often times the contract you receive from the hotel may be one-sided in favor of the hotel, vague in many places, missing essential language, and difficult to interpret.

Hotel contracts have gotten increasingly longer and more complex in recent years.  One reason is because hotels are trying to protect themselves from previous mistakes that have cost them money. Secondly, they are seeking good fortune reigns. Convention hotels have experienced increased occupancy, profits, and annual rates. Due to this fact, performance-related clauses are now the rule rather than the exception.

As a meeting planner, you are entitled to agree to a hotel contract that is written in the best interest of your organization that not only gets you what you want at the right price, but is also clear, easy to read, written in laymen’s terms, and is unambiguous.  Did you ever consider the fact that it’s time for the hotel to sign your contract?

Rule number one in your contract: everything must be in writing.  A verbal agreement isn’t worth the paper it’s written on.  When parties fail to live up to an agreement, written proof of the negotiator’s intent is critical.  It eliminates the “he said, she said” confusion.  What if the original hotel general manager or kind sales executive you negotiated with is no longer employed at the hotel? A written contract ensures that everything agreed upon is in writing to avoid points of contention upon the arrival of your meeting.

What are your obligations for room nights?  Room block, rate, and reservation method are quite standard in a contract, but have you provided a clause that allows for a room block adjustment without penalty and one that flows down to attrition/cancellation penalties? The hotel might have offered the lowest room rate possible, but given this detail, does your provision include rates that are published and may be booked on the internet?  If a lower rate is discovered, does your clause include a must-match for the entire group?

Avoid hotel form contracts.  Hotels can take a brilliant negotiation and reshape it into something ugly that is not in your organization’s best interest. Your hotel contract will be strait forward and 100 percent reflective of the negotiation in addition to being completely understandable.

PEC specializes in Site Selection and Hotel Contract Negotiating. Not only does PEC have a hotel contract that can be presented to the hotel on the client’s behalf, but we have an arsenal of clauses that can be included in a hotel contract that benefits both the client and the hotel. PEC will work to find hotel contract clauses that best apply to the needs of the client and event.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply