First the good news. Our recent reader poll found that most respondents do not feel the economic downturn has had a significant impact on their meetings this year, and most are not cutting back attendance projections for next year. (See cover story, page 26.) Everybody stand up and cheer!
The bad news? Some associations in fields particularly hard-hit by the current economic climate are reporting majordamages resulting from steep attendance declines at their meetings this year. For them, the onerous hotel attrition clauses that have proliferated in the seller's market of recent years have resulted in significant financial loss.
I can actually remember a time when hoteliers did not even think of collecting attrition damages from associations, reasoning that these organizations didn't have the money, and that trying to collect would result in long-term loss of business in this market. Obviously, those days are long gone. Economic instability highlights what a high-stakes gamble it can be for associations to book blocks of hotel rooms years out from convention dates. No matter how good your history and your pick-up has been, you just never know these days when the floor is going to drop out of your industry.
Hotels aren't immune, of course, to the vagaries of the economy. Witness the recent spate of energy surcharges being added to hotel bills at properties across the country in response to escalating fuel costs. (See news story, page 8.) As a business traveler I'm irked by these surcharges when they appear without notice to my bill, and when they are added on top of a plethora of other surcharges and service fees. (For one planner's provocative view on surcharges and service fees, see Talk Back, page 128.)
Is there a standard of reasonableness that can be applied to collecting attrition fees when the bottom has dropped out of a group's industry? And is the use of temporary surcharges by hotels trying to compensate for spikes in energy costs a reasonable response? What say you, good readers? All lines are open.