Every event contract is unique and so is every contract negotiation. But most groups, most events and most contracts share a few basics. We’re not attorneys and we can’t offer legal advice, so we’ve gleaned a few key points from experts who spend their lives immersed in meetings contracts and contract negotiations.
1. Planning and hosting events is not a relationship business, it is a business relationship. Hotels are looking out for themselves. Planners should do the same (James Goldberg, principal, Goldberg and Associates, planner attorney).
2. Cancellation damages work both ways. Be sure your group is adequately protected if the hotel cancels for any reason (Joshua Grimes, Grimes Law Offices, planner attorney).
3. Calculate liquidated damages on a sliding scale based on hotel profit margins, not on revenues. On average, hotels make 77 percent gross profit on sleeping rooms and 38 percent on group food and beverage, so 75 percent and 35 percent are good estimates. If the hotel balks, ask for their actual margins on sleeping rooms and F&B and adjust as needed (Robyn Mietkiewicz, CMP, CMM, director, global meeting management, Meeting Sites Resource, planner).
4. If you don’t understand a clause, don’t sign the contract. A few hundred dollars for an attorney to review language is cheaper than hundreds of thousands of dollars in damages (Lisa Sommer Devlin, Devlin Law Firm, hotel attorney).
5. Service fees are a normal part of event contracts, but beware of administrative fees. Admin fees fall straight to the hotel’s bottom line. If you see admin fees in a proposal or in a contract, take it out (Tricia Van Every, independent contractor and director of national accounts, Premier Event Resources).
6. Once negotiations are finished, print a clean copy that includes all the agreed upon changes for both sides to sign. Incorporating every change into a single document with no new notes, annotations, revisions, strike-outs, addendums or other changes makes it easier for both parties to understand the terms and reduces the risk of misunderstanding (Tony Pastor, manager, McKinsey Learning).
7. If there is a problem, negotiate, don’t confront. If a dispute goes to court, or even to arbitration, only the attorneys win (Tyra Hilliard, former event planner and private practice attorney).