The Facilities Contract
By Mark W. Kustwan, CMP
After you have decided on the goals and objectives for your event, the tentative agenda, the anticipated number of attendees and you have set your budget it is time to find the perfect location and negotiate a win-win agreement with the facilities. Whether you are using a site selection firm, a full service meeting planning company or you are planning and managing the event on your own, you should understand the basics of a hotel contract.

The hospitality planning industry has not reached the point of having a standardized contract. But most agreements do address many of the same issues such as the number of guest rooms and amount of function space they are committing to your function, the costs associated with these commitments, your obligations and your penalties for not abiding by the agreed upon terms.

If you are not familiar with guest room blocks, guest room and food and beverage attrition and cancellation clauses, cut-off dates, function space commitments and concessions then please read on.

Room Block
This section of a facilities agreement details the number of rooms the hotel is taking out of its inventory and holding for your use. It should spell out the number of guest rooms they are holding, the exact days and dates, the specific type(s) of accommodations, room rates and when possible, the guest room locations.

Attrition
Most facilities now include clauses that address the amount permissible the client may reduce their rooms and/or meal commitments. Oftentimes this clause allows the client to reduce their needs by varying percentages on or before specific dates that are outlined within the agreement. If you exceed these amounts you incur monetary penalties that can add up to substantial dollars. This is where knowing your attendees and the likelihood of there attending the event pays off. When negotiating the percentages and dates try to have them reflect your group's personal timetable.

Cancellation Clause
This area of the contract is much self explanatory. Should you cancel within the various timeframes outlined in the agreement you, the client incurs hefty penalties that increase the nearer you are to the actual dates of your function. Have the exact penalties stated in the document.

Cut-Off Dates
Outlines when you must have the final guest room reservations to the hotel (and may also set requirements for when meal guarantees, menu selections or a firm agenda is due to the property). This section allows the hotel to try and resell rooms that you are not using within your room block.

Function Space Commitments
This part of the contract addresses the function space the hotel is willing to commit to you to handle your anticipated agenda. Oftentimes the facility does not outline the specific function rooms or states that they have the right to reassign rooms as they see fit. However it is best to have the actual room names and time of day negotiated and written into the contract and guaranteed to you prior to you signing the agreement. This insures that you will have the space you need when your guests arrive.

Concessions
This is the area of the contract where what you have negotiated above and beyond the basics is written into the agreement i.e. complimentary rooms, free meeting space, room and suite upgrades, VIP amenities, no-charge cocktail receptions, etc.

Remember the contract is written by the facility and therefore designed to protect their interests. But it can and should protect you as well since the contract is the foundation for your program. And a contract may be the only proof you have of the facility's commitments should the property's representative leave prior to your group's arrival.

To be a good negotiator you must be willing to walk away from the negotiating table. And Remember everything IS negotiable.

Mark Kustwan is a Certified Meeting Professional with more than 25 years of conference planning and hospitality industry experience and is owner of OnTheMark, a site selection and full service meeting and incentive company located in East Longmeadow, MA. Reach him at (413) 526-8900 or mark@onthemarkevents.com