Clause: Extra, Extra, Read All About It

Hotel hereby confirms a Group single/double sleeping room rate of $100. Current tax charged on sleeping rooms is 12 percent, including 8 percent sales tax and 4 percent occupancy tax. Neither Group nor its attendees will be responsible for paying any taxes or surcharges on guest sleeping rooms not enumerated in this contract or otherwise disclosed to Group and its attendees unless required by law. Hotel will inform Group of any changes in tax rates or types that will affect Group or its attendees.

Effect: A Taxing Situation

Many attendees — and sometimes meeting planners — are startled to discover how much a $100 per-night sleeping room actually costs because of sales tax, occupancy or bed tax, and other fees that hotels levy on sleeping rooms. If attendees are paying for their own sleeping room nights, taxes that add an extra 5 percent to 25 percent can be an unpleasant surprise. If the group is paying for these sleeping room nights, these “extras” can add up significantly — even if the group is only paying “room and tax” for attendees. In most areas in the United States, hotels are required by law to charge tax on sleeping rooms. The sample clause above simply requires that hotels disclose the exact amount of taxes and fees up front. A tax-exempt group may be exempt from sales tax but not from occupancy tax, so it is helpful to break out the different types of taxes.

Some meeting planners, unfortunately, do not consider the tax rate when they are comparing meeting destinations. A clause that requires disclosure of tax rates allows the meeting planner to make the evaluation, for example, that a $100 sleeping room rate in an area that charges 20 percent in taxes is not as good a deal as a $110 rate in an area with 5 percent taxes. This is also true with budget items such as food and beverage, AV, and meeting room rental.

Although the energy surcharge issue was resolved in favor of meeting groups, it would not be surprising to see new surcharges on rooms surface as hotels attempt to keep their sleeping room rates competitive. Adding a clause like this to a hotel contract requires the hotel to affirmatively disclose any surcharges that are part of the total amount paid by hotel guests for sleeping rooms and relieves the group and its attendees from paying any surcharges that have not been disclosed by the hotel. Groups can then pass this information along to attendees and avoid unpleasant surprises upon check-out or review of the master bill.

Some savvy planners even have the hotel complete a “Hotel Disclosure Checklist” at the time of contracting, requiring the hotel to disclose surcharges for local calls, long distance calls, Internet access, newspaper delivery, and other services associated with guest rooms. Forewarned is forearmed, after all.




Tyra W. Hilliard, Esq., CMP (TyraH@gwu.edu) is a meeting industry lawyer and assistant professor of event and meeting management at The George Washington University in Washington, D.C.