1. Protecting Room Rates

Despite all your legwork to find the right location and room rates for your meeting, even after the contract is signed you may find that the hotel is in the marketplace promoting lower rates over your blocked dates. Is there anything you can do?

Barbara Dunn O’Neal, partner, Barnes and Thornburg LLP, advises planners to raise the issue with the individual hotel, the national sales office for that chain, or even the local convention and visitors bureau. “Tell them that you selected this city and this hotel for that rate, and it shouldn’t be undercut.” While that’s a good business argument, you can strengthen your case by adding a strong legal argument, she said. “You get that by putting strong language in your contract.”

For example, once you have a rate specified in the contract, include a statement that says the hotel will not offer lower rates over the blocked dates. “The problem comes when the hotel comes back saying, ‘That’s all well and good, but I can’t commit that you have the lowest rate,’” she added. They can say you will have the lowest rate excluding corporate buy-in rates, airline crew rates, and other rates that are not made publicly available. “It’s important to draw that line. It’s appropriate for groups to say the hotel won’t offer lower rates over your blocked dates, but if you need to include those exclusions, that’s also appropriate because the public never sees airport crew rates or corporate buy-in rates.”

But what about Expedia, Travelocity, and all the other online sites that are reselling those rooms at a lower rate? Dunn O’Neal explained that hotel revenue managers regularly release these rooms to wholesalers to reduce their unused inventory for any given night. “So it’s not appropriate to say those lower rates won’t exist on the Internet over your dates; it is appropriate to say the hotel won’t sell rooms at lower rates over your dates.” What you need to include in the contract is that the hotel will not publish or publicize those Internet rates, because it’s the publicizing that is going to get your attendees talking about the lower rates they found over your dates.

 

And if the hotel publicizes those rates anyway? “It’s important to include language in the contract that says what you will do about it,” Dunn O’Neal said. She outlined two options: The hotel can immediately stop publishing those rates, or they could offer those rates to your attendees as well. You can include which option your group would like to apply in the contract, though some groups may wish to let the hotel choose which way to go as a negotiation point. “In either event, the contract should reflect that remedy if the hotel does in fact offer lower rates. That will give you a legal argument to go with your business argument that the hotel should not offer lower rates over your blocked dates.” And be sure to periodically check the reservations process by making blind calls to the toll-free number and checking the dedicated Web site to make sure the hotel is offering the proper rate.

What you can’t control contractually are the lower-priced options down the road from your contracted hotel. “You can’t ask the hotel you’re contracting with to match everyone else’s rates.” That’s a site-selection issue, she said, so be sure to check what lower-priced options are available in the vicinity before you book your block if you think this might be a problem.

Then there are the room-block poachers. Also called pirates, these companies cruise the Internet to find out about your meeting, determine who your exhibitors and sponsors are, and possibly even get an attendee list to troll. Then they contact your attendees and exhibitors and say, “Coming to Las Vegas for the meeting? We have the best rates at these hotels, book through us.”

If they use your name or logo, you can pursue them for claims of deceptive advertising and trademark infringement. But if they don’t, the way to fight them is to convince your attendees that the best way to book is through your organization. “The best defense is a good offense. It’s important for groups to communicate with attendees what the appropriate booking channel is, and that your organization doesn’t have any control over other companies that might contact them. Let them know that you can offer them no assurance about the integrity of reservations made through a poacher.”