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2019 Meetings Trends Survey Responses: How Strictly Are Attrition Clauses Being Enforced?
Meetings Today: Are you finding that attrition clauses are being enforced more or less strictly recently? Can you share any comments/observations about this?
Angie Silberhorn: I have found, in recent years, that hotels are less willing to reduce attrition penalties after they’ve been incurred and attrition clauses in contracts have been tightened up with less negotiating options.
The climate has caused us to evaluate our business practices and simply pay legitimate damages due, then use that expense to leverage future organization policy changes, such as implementing a registration fee incentive for attendees who book their rooms in the official block -- Angie Silberhorn, CMP, Conference Director, Warehousing Education and Research Council (WERC), Oak Brook, Illinois
Ilene Page: More strictly. I used to be able to get 40 percent attrition on multi-year deals and now I am lucky to get 20 percent-30 percent. -- Ilene Page, Global Meeting & Event Planner, Front Page Events, Palo Alto, California
Stacy Wald: I have found that when I have a good relationship with hotel that the attrition is not enforced since they want me to come back to hotel for another program. -- Stacy Wald, CMP, Director of Meeting Events, Data Trace Management Services, Towson, Maryland
Gary Schirmacher: Most planners think having a performance clause or cancellation clause is a one-sided affair.
I would tell those that are staunchly no-attrition-clause-driven that your block may be more susceptible to the venue displacing your event with one that might be more profitable. The double-edged sword of having to book so far out to get the right dates can be compromised when an event is under-performing closer in and demand is high for short-term opportunities. -- Gary Schirmacher, CMP, Senior Vice president, Industry Presence & Strategic Development, Experient, A Maritz Global events Company, Boulder, Colorado
Liz Whitney: The venues we work with are fairly strict with attrition enforcement. And attrition clauses have been less generous--no longer a given to get 20 percent. Fortunately for us we rarely over estimate our room block commitments. We have had some tense moments because of slow and last-minute registrations, but I find having open dialogue with the event manager helps us through these times.
Event managers will offer suggestions because they want us to succeed and are very willing to work with us. -- Liz Whitney, WLP, International Warehouse Logistics Association (IWLA), Des Plaines, Illinois
Wendy Sutowski: More strictly. We have been able to negotiate them to be reduced in exchange for some other expenditure, but venues are not waiving or eliminating any fees. -- Wendy Sutowski, CMP, Director of Events, The American College, King of Prussia, Pennsylvania
Gina E. Allega: I have found that hotels are giving less flexibility in all clauses, in general, including attrition clauses. It's rare that we need to enact one, but when we do, I find less flexibility here as well. -- Gina E. Allega, CMP, Senior Program Manager, Meeting & Event Services North America, BCD Travel, Cleveland
Debbie Kopkau: Yes, we are especially since the market is good and space is scarce. -- Debbie Kopkau, Director of Certification, MBA, CAE, CMP, GMS, Michigan School Business Officials, Lansing, Michigan
Scott Shellman: Hotels seem to be enforcing attrition clauses more so than they have in the past. We’ve had to deal with attrition conversations in situations where the total room pick-up has been very close to the attrition cutoff. In the past, hotels would waive off those conversations because our numbers were so close, but now they have the conversation. I think [relates to] the industry becoming more commoditized vs. being relational.
Many hotels are allowing a re-visiting of the room block at 36, 24 and 12 months for programs we’re booking four years in advance. That helps with the avoidance of attrition, as we’re able to better adjust numbers up or down based on more recent year’s pick-up.
It is a win-win for the suppliers and clients, as both have more time to plan accordingly.
Another factor in the attrition discussion is the continued growth in the alternative lodging category. Guests are becoming more savvy about booking homes, condos and other alternative lodging facilities. This will continue to cut into room blocks as more inventory is added and guests become more familiar with such accommodations. -- Scott Shellman, Principal, Framework Meetings and Destinations, Coeur d'Alene, Idaho
Geoffrey S. Duncan: Yes. Attrition is being used to downscale departments for cost-cutting with extra duties passed to remaining staff or eliminated or streamlined for efficiency. For example, our Literature Department was phased out (sending catalogs, pamphlets, etc.) by attrition and “Green/Eco friendly” alternatives (digital versions of literature) that can be emailed by Customer Service. Residual paper literature now is processed by our packing shipping department. -- Geoffrey S. Duncan, Director of Sales & Marketing, Radius Display Products, Dallas
Jack Molisani: I can’t really answer that since I’ve always negotiated REALLY low attrition numbers. We can always add more rooms if needed, so we don’t over-commit. This happened in 2018--the conference room block and then the whole hotel sold out, so we lined up a few courtesy blocks at hotels down the street. It is more important for me to minimize financial risk than to guarantee everyone gets a room in the conference hotel (Which, by the way, is why I don’t book events at remote resorts---no place to put people if we get a good turnout). -- Jack Molisani, Executive Director, The LavaCon Conference, Long Beach, California
Don Pietranczyk: The relationships I have with vendors that have these clauses are pretty long, therefore there has been leeway with them. -- Don Pietranczyk, Senior Manager, Experiences and Activations, New York City
Diana Bryant: I haven’t seen any change. However, we are beginning to widen our block a bit rather than only use our pick-up history. Our blocks sell out very quickly and some people choose not to attend if they can’t stay in the host/conference hotel. Then, we will also have cancellations that are too late to use. One venue continued to take reservations beyond our contracted block and group rate cut off (very nice) and we saw a notable increase in attendance. It was great to see what attendance would be for that event when there is no limit on the block or rate cut off. --Diana Bryant, Director, Conferences & Meetings, TVPPA (Tennessee Valley Public Power Association), Chattanooga, Tenn.
Kay B. Clark: I am having to negotiate more to get cumulative attrition. I rely on my historical pick-up records and my reputation for not over-extending our contracted block. I know rooms mean revenue and respect that for our hotel partners. I treat their rooms (revenue) like my own budget line item and feel responsible to provide what I’ve promised. But some hotels just aren’t willing and I have walked away from contracts that won’t allow for cumulative. --Kay B. Clark, CMP, Director, Meetings & Events, Material Handling Industry, Charlotte, N.C.
Samantha Vogel: Because we are corporate, we don’t see a lot of issues with attrition, since our attendees are required to attend. However, we do contract very specifically to ensure our block is cumulative in regards to our pre- and post-attendee vacation nights. We also have specific resell and occupancy requirements in our attrition clause to ensure if we do hit attrition, any fees owed by GameStop are mitigated fairly and feel mutually beneficial to both parties. We find that hotels are typically willing to accept our resell and occupancy clauses. -- Samantha Vogel, CMP, Sr. Manager, Meetings & Travel, GameStop, Inc., Dallas
Tracy Orpin: I find attrition clauses have always been enforced strictly. --Tracy Orpin, CMP, IAAP, Kansas City, Mo.
Katie K. Riggs: Yes more enforcement and little flexibility. I am sure this will shift as the economy does. -- Katie K Riggs, CMP, CMM, CAE, HMCC, VP, Client & Conference Services, Raybourn Group Int., Indianapolis
KD O'Neal: Attrition clauses are being enforced more strictly with the increase of events (year over year since 2015) on conference/event venues and lodging inventory. I have noticed the specifics of attrition clauses have become highly negotiated and have been contentious. -- KD O'Neal, CMP MBA, Conference & Event Services Manager, University of Dallas, Irving, Texas
Jef Robinson: Attrition is always a focus of contract negotiation, but I have found that some venues are flexible, especially if total spend is such that they can afford to be so. Where volume is reduced and revenue does not meet commitments, then it is likely that some will enforce contracted attrition. Highly preferred venues are less likely to do so as the relationship means more than a potential low value penalty. -- Jef Robinson, Global Category Manager–Travel & Meetings, Anonymous, London
Leslie Zeck: Hotel attrition is getting stronger but we are booking less and less hotel rooms. This is only an issue in the USA, not any other country where we host meetings. -- Leslie Zeck, CMP, CMM, HMCC, Director of Meetings, International and American Associations for Dental Research, Alexandria, Va.