Attrition May not be a New Problem, but it is a persistent one, according to planners and hospitality professionals at the Passkey Housing Forum, held in Boston August 22 to 24. Especially so now that the market has turned, putting hotels back in the driver's seat as demand heats up, new supply slows down, and hotel owners pressure management companies to become more aggressive in chasing profitability quarter to quarter.

“Hotels today don't hesitate to sue their clients,” said John Foster, Esq., of Foster, Jensen, & Gulley LLC, at a session he led on contracts and negotiation. They're also trying to shift as much of the risk as they can to meeting planners which, he said, “I don't think is unreasonable, as long as they do it the right way.” That's why it's more important than ever for planners to check contracts for vague or one-sided clauses, for what might be missing, and to revise or rewrite the contract to include all the necessary terms and conditions.

When calculating attrition, Foster said to always make sure the damages equal lost profits, not total lost revenues, because “why should you pay for expenses they don't incur?” Know what the average profit margins are on guest rooms and catered food and beverage functions so you know what to base damages on. Another good way to protect your association is to base your damages formula on guaranteed room nights.

Hotels, however, may try to get you to guarantee in your attrition clauses that you'll spend a minimum amount of revenue for guest rooms. Foster says this is a bad idea because it shifts all the risk to planners. For example, what if you booked the meeting in 1999 for a 2002 meeting? The economy completely changed, so your negotiated $200 group rate won't look so hot when the rack rate is now $150. If your contract was written to guarantee revenue, you're out of luck if you can't make the minimum. “It's not your responsibility to manage a hotel's room rates,” he said. “Why should it be the hotel's responsibility to manage the planner's revenues?”

Maximize Those Room Blocks

When the group broke into round tables to discuss how to maximize room blocks, they came up with many ideas, including these:

• Make sure everyone up and down the line understands what's in the contract and what the various clauses mean.

• History is key in many ways. One is so that everyone can have an idea of the percentage of attendees who traditionally book outside the block.

• Include a question on the post-con evaluation asking attendees whether they stayed in the block, and if not, why not.

• Don't include the direct 800 number to the hotel on the main meeting page; make people click through to the housing form to encourage them to use your housing company. Similarly, make sure your links click through to your housing company, not the hotel's direct URL.

• Planners should find out what's going on in the area pre- and post-event — if there's a NASCAR race in town, there won't be many shoulder rooms available.

• The carrot approach: Offer attendees restaurant and attraction discounts for staying in the block. The stick approach: Don't allow them to use the shuttle if they're not staying in the block.

• Give exhibitors points they can use toward prime booth space for staying in the blocked hotels.

• Always include an audit clause in the contract so you can check your attendee list against the hotel's guest list.

• Provide incentives for attendees to book within a certain time period. Another variation on this would be to provide tiered incentives for different time periods leading up to cutoff.

• Design your registration so that attendees have to book their rooms before they can register for the conference.

• Track by bed, not by room, for double-double-heavy groups.

• Book the overflow within the same hotel as your regular block, just at higher rates.

• To deal with underblocking of shoulder nights, one possible solution offered was to set a minimum stay, so if someone comes in on a shoulder night, they have to stay through peak nights as well. “Once peak night sells, we lift that restriction,” said one attendee.

• Ensure that the contract includes a clause stating that the hotel will match lower published rates if you can't get the hotel to agree to not publish any rates lower than your group rates over your meeting dates.

Meetingsnet

• Looking to choose a good event-production company? For some tips, go to meetingsnet.com, click on “Checklists,” then “More How-Tos,” and read an article called “Show Time.”

• What's a wiki? To find out how you can could use these collaborative Web sites, go to meetingsnet.com, click on “Technology,” then “Wikis and the Culture of Collaboration.”

• Upcoming shows: The Professional Convention Management Association, January 13-16; Meeting Professionals International, February 3-5; and the Religious Conference Management Association, February 5-8.

• Do your attendees care about green meetings? According to the Gallup Organization, 77 percent of Americans say they do. For more on green meetings, go to meetingsnet.com, click on “Checklists,” then “Green Meetings.”

Free Expert Advice

The Meetings Community, commonly known as MeCo, is more than a listserv, as its growing membership could tell you. New this year are a series of monthly, expert-led chat sessions, including one on blogs and other Web 2.0 goodies by AM's editor, Sue Pelletier. While the live chat sessions are available to the general public, the archives are only accessible to members. The good news is that membership is free.

To learn more about MeCo, go to meetingscommunity.com.

For more articles on attrition, visit our attrition-busters page.