Unless Osram Sylvania Inc. can get some quick relief from a Florida court, it’s going to have to find a different location for its national sales meeting, booked for October.
The Danvers, Mass.–based lighting products manufacturer, the North American operation of Osram GmbH, Germany, is suing the Boca Raton Resort & Club for canceling its fall meeting at the exclusive Florida Gold Coast property, which it booked three years ago. Thebetween the company and the resort, according to Osram Sylvania spokeswoman Stephanie Anderson, calls for the resort to provide the company with 421 rooms from October 21 to 24 of this year, with an additional 30 rooms on October 20.
According to the lawsuit, a representative of IntraWorld Incentives—a Boca Raton–based destination management company hired by Osram Sylvania—contacted the resort in May to make a change to the meeting. “To [his] surprise,” the lawsuit charges, “he was met with a response indicating that the resort had unilaterally canceled [the company’s] the reservation.” During a later meeting, the lawsuit goes on to state, IntraWorld learned that the Boca Raton Resort was canceling the booking because it had a larger group that had contracted for more rooms and more room nights at what Osram Sylvania “believes is a higher daily room rate.”
The canceled booking “came as a complete surprise,” says Anderson. “It is our largest company meeting, and the size and format of the meeting has specific timing and logistical requirements.” Anderson said the cancellation was also unexpected because of the long history Osram Sylvania has with the resort. It has held 17 meetings at that venue since 1984.
The resort declined to comment on the case since the litigation was pending.
The company is asking the circuit court of the 15th Judicial Circuit in Palm Beach County to grant an injunction requiring the Boca Raton Resort to honor the contract. In the lawsuit, Osram Sylvania argues that, despite attempts by the resort to find the company an appropriate venue at a sister property, none of the alternatives was satisfactory.
“Even if suitable alternative space could have been found on a different set of dates,” the lawsuit states, “the logistical hurdles in trying to have over 400 employees rearrange their long-standing schedules on short notice to a national sales meeting at a different time would ensure that OSI could not get anywhere near the full attendance it enjoys and requires at its national sales meeting.” The company wants an order from the court requiring the resort to honor the contract, and while Osram Sylvania “definitely has a case,” says Washington, D.C., lawyer James Goldberg, of Goldberg & Associates PLLC, whose practice focuses on representing associations, corporations, and independent meeting planners, “getting a court to grant that is not the norm.”
The issue, says Goldberg, is whether, under the contract, the resort was justified in canceling the booking, and, if not, how much it is going to cost the resort in damages. “I have a gut feeling they’ll settle,” he says.
What is unusual about this situation, says Goldberg, is that “hotels are usually not the ones doing the canceling.” He points out that the contract was agreed to in 2004 during a time when the hotel market was depressed, and the agreed-upon rates “may have been favorable to Sylvania. So it may not be surprising that in 2007, when that market is a whole lot better, and the rates are up, that a hotel decides it can get a lot more money for that space.”
Still, says Goldberg, “I think it is unusual for a hotel to cancel out a customer with whom it has this long-standing relationship.” Since the company’s annual meeting—as scheduled—is just three months away, it’s asking for expedited review of the case. And Anderson says that at this point Sylvania has no fall-back position if it turns out it can’t use the Boca Raton Resort.
“We are pretty focused at this point,” Anderson says. “We have a contract—something that has been the basis of our relationship with the resort for years, and we’re focused on seeing that the contract is enforced this year.”—Michael Bassett