Been to see the company's general counsel lately? -- If you're like a lot of meeting managers, you have. Meetingare getting longer and more complicated all the time. The Internet, while making your planning process more efficient than ever, also represents a brave new world of potential legal pitfalls.
We asked three legal experts--John S. Foster, a principal in Foster, Jensen & Gulley, Atlanta; Jonathan T. Howe, senior partner/president of Howe & Hutton, Chicago; and Jed R. Mandel, a partner in Neal, Gerber & Eisenberg, Chicago--to name the trends they believe are shaping the meeting industry in 2000 and beyond. Here are their top 21.
The Big Picture 1 meeting planners and hoteliers will become more sophisticated in negotiating contracts. "Both sides will become familiar with legal nuances and more sensitive to them," says Jed R. Mandel. And those that don't? "The planner or supplier who does not have a total understanding of all the dynamics of a hotel or a meeting will be left by the wayside," according to Jonathan Howe.
2 contracts will be longer and more detailed. "Both sides are now realizing that the full intent and expectations of the parties need to be put into contracts," says John Foster. "Even now it's not unusual for a major meetingto be 25 pages long." In the past, for example, clauses might have been one paragraph long; now some are a page and a half, spelling out exactly what performance is expected, how it is measured, and how any damages will be calculated.
3 more clauses will be covered in contracts. Planners and suppliers are increasingly putting their precise expectations in writing. One clause popping up in contracts, for example, states that payment of the hotel master account is contingent on the planner's receipt from the hotel of a post-convention report, detailing room pickup and the food and beverage pickup.
Mission Impossible 4 there will be more work toward standardizing contracts--but no success. Efforts like those by the Convention Liaison Council (CLC) to establish "standards" or "accepted practices" in several areas, including contracts, will continue as contracts become more critical than ever. But the move won't work. There will be a realization that one size does not fit all when it comes to contracts; each must be created and negotiated on its own.
The Nitty Gritty 5 look for strict hotel performance requirements."Planners will start to push for contractual, performance-based requirements," says Mandel, including "an examination of quality of service," for example, quality of food service, the number of staff at check-in, the time of day rooms are made up, and other issues.
Fair--or Far Out? 6 reverse attrition is here. Associations have begun to write "reverse attrition" clauses. These state that the hotel must pay up if it sells some of the association's rooms to another meeting. "If hotels expect associations to pick up and pay for a certain number of room nights, then the contract should state that if the hotel doesn't deliver a certain number of room nights to the association, the hotel should pay the association damages," Foster says.
Wired World 7 cyber correspondence creates potential pitfalls. The issues: electronic communication, like written correspondence, may be construed as forming a contract with another party; what you e-mail may be used against you, such as defamatory statements (defamatory statements contain untrue or malicious information or information that injures another's reputation); and potential anti-trust violations could be documented through electronic communication (messages encouraging others to boycott a vendor, for example).
8 the authenticity of e-mail messages comes into play. The sender of an e-mail can later deny sending the message. Related issues include determining where the e-mail "exists" in terms of the business being conducted: Is it from New York if that's where the sender is based? Or is it from that legally undefined realm called "cyberspace"?
9 internet contracts, digital signatures will become more commonly used. An increasing number of companies and individuals will use new technology that provides for "digital signatures" that can be tracked and verified. The software enables individuals or companies to encrypt an e-mail message with a private code that will be used in lieu of a "real" signature.
10 E-rfps are here to stay. More meeting planners will use electronic requests for proposals (e-RFPs) as a way to save time and paper. As in other electronic forms of doing business, e-RFPs could raise issues regarding the integrity and accessibility of information. The "integrity" of information means the "protection" of information: In other words, e-RFPs raise the question of who could possibly access confidential and/or proprietary information in that RFP (such as hotel pricing or meeting requirements).
11 e-commerce raises legal issues. The growth of electronic commerce carries legal implications for every industry. For the meeting industry it might includes issues related to online registration and security of credit card numbers sent over the Internet, Howe says. Another issue is how attendees' personal registration information might be used without their consent.
12 the law has to catch up with the internet. The meeting industry--along with other industries--is entering a brave new world of electronic communication and e-commerce. But clear legal signposts have yet to be constructed. "We are still trying to find our way through the age of paper. The law is always about 100 years behind a technological advance," says Howe. "The challenge will be to take current legal approaches and apply them to new technology and new demands on the marketplace." In the absence of needed answers, new legislation that is designed to address the most pressing issues may be the industry's best alternative.
I Know What You Did Last Summer 13 technology will enable hotels to collect more detailed data on meetings. Hotels will take advantage of that capability, creating a database on a group and, perhaps, sharing it with a sister property booked by the same group for another function, says Mandel. The legal corollary could be concerns about privacy, as well as the hotels' passing that information on to marketers.
My Way 14 more planners will try to use their own contracts."Hotels usually prefer to send out their own contracts; they want contracts on their letterhead," says Foster. "But companies are looking for ways to make their jobs more cookie-cutter. Everyone is trying to simplify their side of things, and hotels too are coming up with model contracts. The final product will be a combination of what the hotel wants and what the planner wants."
Who's in Charge? 15 more companies will use third-party planners. When companies outsource to independent planners, it is more critical to spell out, in legal terms, the relationship between client and third party. How outside planners are compensated and what happens if clients want to terminate their services are among the issues.
Choices, Charges 16 planners will have more service levels to negotiate. Emphasis on price will be replaced by a focus on what groups receive for that price, says Mandel. Therefore hotels will let groups choose a rate that includes a specific level of service, not unlike an individual's choice to stay on a hotel's concierge level.
17 hotels will unbundle more charges. Many hotels are already separating out specific charges for services such as fitness center access or business center use. This trend will result in a kind of menu for hotel services--another negotiable area.
Run the Numbers 18 the name of the game for hotels: yield management. "Planners will need their own computer program to find out what their meeting is worth," says Howe.
19 hotels also will focus on return on earnings (roe). "We've seen a move from some of the traditional hotel companies, which prided themselves on service, to companies listed on the New York Stock Exchange, whose obligation is to investors more than customers," says Howe. These companies are gaining greater skill in pricing and delivering their product. That means tougherfor you.
See You in Court 20 there will be a greater threat of litigation. Hotel time-frames for seeking amicable solutions to disputes are shorter, Foster notes. In the past, there was relatively little litigation in the meeting industry, and there still is relatively little, especially as compared to other industries. However, the nature of the lodging industry has led to a change in attitude. Today most chain-affiliated hotels are not company-owned but have different owners who are more concerned with their individual financial results than with the larger issues affecting all chain-branded hotels.
Just Wait Until 2001 21 the next market shift favors the meeting buyer. "Probably in the next 18 months we will start seeing a shift in the market with occupancies declining as new hotels come on line," says Foster. Newer hotel salespeople, who have known only the boom times of the past five years, will have to change their short-term approach to the meeting industry to a long-term view. That's the news planners have been waiting for. It will put them back in the driver's seat--until the next market shift.