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MPI-SEC: Advanced Hotel Contracts: Maximize Your ROI, Minimize Your Exposure


MPI-SEC: Advanced Hotel Contracts: Maximize Your ROI, Minimize Your Exposure We just pass the time in our hotel rooms And wander 'round backstage – PowerPoint PPT presentation

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Title: MPI-SEC: Advanced Hotel Contracts: Maximize Your ROI, Minimize Your Exposure

MPI-SEC Advanced Hotel Contracts Maximize
Your ROI, Minimize Your Exposure
  • We just pass the time in our hotel roomsAnd
    wander 'round backstageTill those lights come up
    and we hear that crowdAnd we remember why we
    came --Jackson Browne, Running on Empty,
  • Tom Pasha, CONTACT Planning

  • Tom Pasha
  • Hotels since age 15
  • 14 Hyatts over 20 years
  • 6-time DOS
  • National Sales Director
  • Founded CONTACT Planning, a national meeting and
    golf planning company
  • Trains planners from
  • The Hotel Side

In this session
  • TONS of Information!
  • Very Interactive
  • Ask lots of good questions
  • Take lots of notes
  • Contracts are critical to a great meetingheres
    the hotel side of them.

Hotels Need Meeting Business!
  • Hotels Depend on Groups and Meetings
  • Higher rate
  • Better catering, facility use golf, spa, gaming
  • Prime time groups increase revenue
  • Off-peak groups increase occupancy
  • Hotels are designed with Group Meeting Space to
    fill rooms!
  • What can you Negotiate? Everything!
  • When you confirm the negotiations, its time to
    go to Contract.

Hotels Contracts Confirm.
  • Dates, Rates and Space
  • Concessions and Considerations
  • Reservations
  • Payment and Billing
  • Penalties Attrition and Cancellation

Good contracts confirm your Space, Dates and
  • Space General Sessions, Break-outs, Meals, with
    set-up and tear-down times, turn times, weather
  • Dates Make sure the program matches the rooms
    add staff arrival and departure dates VIP and
    speaker rooms
  • Rates Rates are ALL the revenue streams of the
    hotel and include..

Contracted Rate
  • Much more than Room Rates!
  • Be sure to Contract
  • Room Rates (Sgl /dbl / trip / quad)
  • Suites Rates (1, 2-bdrm suites?)
  • Staff Rates
  • Comp rooms 1/40, 1/45, 1/50?)
  • Resort Fees (PP or Per Room?)
  • Internet access fees Room and Mtg Space
  • Parking Fees (Staff price / Comps?)
  • Porterage Fees (Optional?)
  • Housekeeping Fees (Optional?)
  • Room delivery fees

Contracted Concessions
  • After the Room Block and Rate information,
    Concessions are next. Bullet-point format,
    include comps, upgrades, VIPs, meeting space, so
    everything is easily found and confirmed.
  • Sample Concessions
  • 1 per 40 comp room credit, calculated on a
    cumulative basis
  • Three VIP upgrades to Junior Suites at the Group
    Rate for the duration of the conference
  • One (1) two-bedroom VIP suite complimentary for
    the duration of the conference
  • Complimentary wireless internet in all guest
  • Complimentary wireless internet in all meeting
  • Complimentary meeting space, based on the program
    and pick-up
  • Complimentary Health Club Fitness Center for all
  • 10 off AV equipment
  • 10 off Catered FB (Or current menu prices GTD
    for future year event)
  • Additional guest rooms will be accepted at group
    rate based on space availability
  • Group rate extended three days pre and post the
    event, based on availability.

Reservations Items
  • Reservation Method Individual, Rooming List,
    Housing Bureau
  • Rooming List Due date-Cut-off
  • Room Block Review Date 10 or 20, 3 to 6 months
    prior to Cut-off, not Event Day.
  • Rooms received after Cut-off should be based on
    room availability at the Group Rate
  • Rates available 3 days pre- and post-meeting
    dates, space available

Payment and Billing
  • Billing Master Account
  • All Charges to Master
  • M/A Room Tax, Ind. Incidentals
  • GTD to corp Individual Payment at check-in
  • Master Account Catering, Specified Staff Charges,
    per Rooming List
  • Payment Pre-payment / Payment
  • Credit Card Authorization Credit
    Application Form
  • Special Forms Purchase Orders, W-9, Separate
    Invoice for every deposit due

Contracts are Fun, But What Happens IF Things
Go Wrong?
  • Attrition
  • Cancellation
  • Performance Penalties
  • Remember that Planners and Hotels REALLY hate
    these conversations, so if you work as partners,
    you will avoid most problems.

Avoid Penalties With Planning, Executing,
  • Planning
  • Since you want a hotel to hold Definite dates,
    you have to make a Definite commitment
  • Definite Dates, Rates and Space
  • Get a Definite Commitment from
  • VIPs and Speakers,
  • Budget, FDA, all outside approvals
  • Check for competing / similar events in
  • Have your bosses sign a commitment memo
    or purchase order

Executing to Avoid Penalties
  • Communicate
  • Before Cut-off Does your contract have a 3, 6 or
    9 month review? Does it show exact dates and
  • Observe all review dates
  • Follow-Through
  • Keep in touch with the hotel
  • Are your counts accurate?
  • Dupes and Cancels
  • Registration Vs. Reservations
  • Rooms credited to the block
  • Pre- and post rooms
  • All banquet charges counted

Attrition and Cancellation.
  • EWWWWWW! Both Hotels and Planners HATE this
  • Book a group when youre sure it is happening!
  • Contract an extended decision date, if youre not
  • Contracts should have a sliding scale of
    cancellation dates the penalty increases as the
    cancellation date approaches the event date.
  • Tell the hotel if its a continuing education
    block or a promotional block ask for a Courtesy
    or No Attrition block.

Contracting Rooms Minimums and Attrition
  • Negotiate and contract Rooms minimum at 80 of
    the block.
  • Contract a Resell clause, so the hotel can
    re-sell the released space, and youll pay for
    what was not sold
  • Contract a Re-book clause, so any Cancellation or
    Attrition fees are applied 100 to your next
    contracted date
  • Whenever possible, any attrition or cancellation
    penalty based on Rooms profit, of 80, Not
  • Determine whether cancellation is taxable --ask
    to see the tax code covering cancellation fees.

FB Minimums and Attrition
  • Base the FB minimum on your selected menu, not
    on the Average Check assigned by the hotel.
  • Contract the minimum at _at_ 80
  • Negotiate to have the FB minimum include Tax and
    Tip Inclusive
  • Have meeting space rental include tax and tip, in
    the event of a fee.
  • Have hospitality catering applied to the minimum
  • Contract to pay the anticipated profit of the
    Catered FB, at 40, not retail.

Re-Sell Clause?
  • Most hotels have a version of this in their
    contracts they typically dont offer it, but
    will add it if requested make sure it is in your
  • If you are liable for a cancellation, ask for the
    hotels Daily Report or Flash Report for those
    days. Ask the hotel to compare it to their
    Annual Forecast for the cancelled days, to see if
    they were actually affected.
  • Pay for the difference between the estimated
    revenue and the forecasted revenue _at_ anticipated
    Rooms profit of 80, not the 100 retail.

Re-book Clause?
  • If you re-book the same meeting within 6-12
    months of the cancelled dates, you should have
    the cancellation fee applied as a pre-payment for
    the new dates.
  • Ask for 100 of the prepayment to be applied,
    sometimes youll get it, and others may be 25,
    50 or 75.
  • Again, make sure it is clearly spelled out in the
    contract, before anyone signs anything!
  • Make sure everyone signs and counter-signs

Attrition Clause Samples
  • This Agreement is based on Groups use of the
    guestroom block as outlined above. However,
    thirty (30) days or more, prior to the first day
    of arrival, Group may reduce its guestroom block
    by a maximum of 10 cumulative. Thereafter,
    Group shall pay Hotel one nights guestroom rate
    and tax for each unused guestroom night based on
    the guestroom night commitment or the adjusted
    guestroom night commitment. No payment shall be
    due, however, for any night during the Group stay
    in which the Rooms Revenue meets or exceeds the
    Rooms Revenue as forecasted in the hotels Annual
  • In the event any attrition charges are posted to
    the Master Account for the above group, the
    entire amount will be applied as a credit towards
    any rebooking of this group within 12 months
    following the departure of this contracted event.

THE Ultimate Attrition and Cancellation Clause
  • Seminar / Education Meeting Review Date
  • The ltgroupgt will have the option of reviewing the
    pick-up and registration performance of the group
    30 (45) days prior to arrival. At that time, the
    ltgroupgt may increase the block and space
    requirement, based on hotel availability or
    decrease and/or release the booking with no
  • Any reductions or cancellations occurring within
    30 days of the contracted arrival date will
    result in a cancellation charge of ______ to be
    paid upon receipt of invoice.

Contract Clauses to Request
  • Be sure to Ask for
  • Construction and Renovation clauses
  • Entire Agreement
  • Performance Clauses
  • Waiver of Corkage for contractors
  • Mutual Indemnification
  • Lowest available rate over event dates.
  • Resale AND Rebook Clauses

Contract Clauses to Request.
  • Construction or Renovation.
  • Hotel acknowledges and agrees that there shall be
    no planned or scheduled alterations construction
    or renovations during the period of the meeting.
    For any renovations that would impact the
    successful completion of this event, the Group
    will have the option of postponing the scheduled
    event on a space available basis or cancelling
    the event at the hotel without penalty.
  • Entire Agreement.
  • The foregoing Agreement, set forth the entire
    understanding between the parties hereto and
    supersedes all prior agreements, arrangements,
    and communications, whether oral or written, with
    respect to the subject matter hereof. This
    Agreement may not be modified or amended except
    by the mutual and prior written consent of both
    parties. No additional Rental Fees, Minimums or
    other charges not specifically set forth in this
    contract can be added at a later date, without
    mutual agreement by both parties.

More Clauses
  • Performance Clause
  • It is agreed that in the event of a problem in
    facilities or service, that the client will
    clearly identify the issue to the sales and
    convention service manager assigned the hotel
    will have the opportunity to remedy the
    situation. In the event that the proposed remedy
    is not mutually agreed upon as resolving the
    issue, the client reserves the right to negotiate
    appropriate and proportionate adjustments to the
    Master Account.
  • Outside Contractors
  • Catering, in-house electrical service and rigging
    are exclusive services provided by the hotel.
    The hotel agrees to waive any service fees, patch
    fees or other billing in the event the Group
    selects an outside contractor for
    convention-related services such as DMCs, Décor,
    Audio-visual services, etc. Standard and
    reasonable licensing and insurance will be
    required from any outside vendors.
  • Mutual Indemnification
  • Each party to this Agreement shall, to the extent
    not covered by the indemnified partys insurance,
    indemnify, defend, and hold harmless the other
    party and its officers, directors, agents,
    employees, and owners from and against any and
    all demands, claims, damages to persons or
    property, losses, and liabilities, including
    reasonable attorneys fees (collectively,
    Claims), arising solely out of or solely caused
    by the indemnifying partys negligence or willful
    misconduct in connection with the services
    contemplated by this Agreement. This paragraph
    shall not waive any statutory limitations of
    liability available to either party nor shall it
    waive any defenses either party may have with
    respect to any Claim.

The Final Edit.
  • Check that the client name, group name, hotel
    name and all contact information is accurate
  • Check and double-check that space, dates and
    rates are accurate
  • Set-up times, event turn-times, weather back-up
    rooms reserved, exact access times.
  • Make sure all concessions are on bullet-points,
    not hidden
  • Check to confirm the program is exactly as you
    want it
  • Make sure all the clauses are clear
  • Negotiate all Cancellation and Attrition clauses
  • Check that the Resell and Rebook Clauses are

Ready to Sign the Contract?
  • NOT YET!! Double-check everything! Its a real
    document (VERY real sometimes!)
  • Make any changes before you sign the final
    contract once its signed, its done.
  • Line-outs are legal date and initial any
    changes hotel to counter-initial changes
  • For major changes, request a re-write
  • Sign, date and scan or fax-return the contract,
    have the hotel send you a countersigned copy.
  • Make sure you receive a counter-signed copy
    Legally, a contract without a countersignature is
    binding ONLY on the signer.

And finally
  • Hotels are in the Service business! They are NOT
    out to get you!
  • Good negotiations lead to good contracts
  • Contracts are critical, but be sure they are fair
    for both sides you want the group to be a
    success and for the hotel to want to work with
    your group!
  • And, as always.

Call me if I can help!
  • Thank You!
  • Tom Pasha
  • CONTACT Planning
  • Tel 407-891-2252
  • And still those voices are calling from far
  • Wake you up in the middle of the night, just to
    hear them say,
  • Welcome to the Hotel California.