It's no surprise that the one-two punch of the September 11 terrorist attacks and the stagnant economy has slashed the number of hotel development and renovations projects scheduled for 2002. Industrywide, according to PriceWaterhouseCoopers, 6 percent of hotel projects scheduled for completion in 2002 and 2003 have been canceled or deferred.
Jonathan Howe, senior partner at Chicago-based law firm Howe & Hutton Ltd., urges planners to make sure they're contractually covered when they make a pre-opening booking, on the chance that the hotel isn't finished in time for the meeting.
“Too often planners take a hotel's word that it will be open on time,” says Howe. “I always follow Ronald Reagan's advice — trust, but verify.”
Howe adds, “You should have in yourthat if the hotel fails to open on the agreed-upon date, they will find you a comparably rated hotel in the area, at their expense, so that you have a place to hold that meeting. Above and beyond that, planners should negotiate a financial consideration to be paid if the hotel doesn't deliver.”
Howe also suggests thatshould demand monthly reports generated from the hotel to the planner to track construction progress. Basically, I want to do everything I can contractually to make it unattractive for the property to fail to deliver.”
The same philosophy holds for renovation projects. At the 1,500-room San Francisco Marriott, a $46 million renovation set to begin in November was put on hold for a year. However, the delay will have no impact on meetings, according to Chuck Pacioni, director of sales and marketing. “We're very careful not to overpromise and underdeliver.”
But what about those cases when a planner has booked rooms at a hotel they are expecting will be renovated — and they're not? Or have been assured there will be no renovations during their meeting, only to hear the drone of jackhammers down the hall?
“When meeting planners are negotiating with a hotel, they should always ask about the possibility of a renovation happening,” Pacioni says. “If they find out that there will be one, then they should talk to the general manager and the director of engineering to determine the extent of the renovation. Take it beyond the hotel salesperson.”
Too often, he says, planners fail to ask about renovation details and they don't protect themselves contractually — and too often, hotels fall short of full disclosure with regard to renovations that might occur at the time a meeting is in-house.
“There should be heavy responsibility on the hotel to overcommunicate renovations to the meeting planner so that everyone knows what's happening,” he adds. “This is especially true in cases where renovations are planned after the contract is signed. Be sure the renovation-disclosure clause allows for financial compensation or no-cost relocation if a renovation becomes disruptive.
(For more advice, see “Clause & Effect,”page 18.)