Special D Events

Special D Events

What You Should Know When Reviewing Venue & Hotel Contracts

A woman signs a contract while another woman points to a specific part in the contract.

Contract clauses are a crucial aspect of event management. They outline the rights, obligations, and responsibilities of all parties involved, providing a legal framework that safeguards the interests of both the client and the venue or hotel. Understanding the clauses is fundamental to creating a harmonious and mutually beneficial partnership. As your event agency, Special D Events is well-versed in contract law basics and keep ourselves updated with any legal developments that might impact event contracts. Knowing your way around these clauses isn’t just savvy—it’s downright essential and can save you hardship and money! 

With that being said, here is what you should know when reviewing and negotiating venue and hotel contracts.

Dates, Timelines, & Cancellation Policies

Picture this: you’re set to host the event of the century, but whoops, a sudden twist in the plot requires a change of dates. You will be prepared for this scenario as long as you have negotiated these contract clauses:

Re-Sell or Re-Book

Include a re-sell or re-book clause in your contract in addition to the cancellation policy. Either clause should state if the hotel or venue is able to rebook and deduct the amount of the new anticipated revenue from the assessed liquidated damages you owe. If the hotel or venue is not able to rebook or refuses to reduce the anticipated revenue from the liquidated damages, we recommend adding this statement: “100% of the liquidated damages may be applied to a future booking at hotel/venue as long as it is held within 12 months of cancelled event.” With this sentence included, even if they refuse to discount your cancellation fees, you may be able to hold the rescheduled event or an event with a similar budget within a year of the cancelled event dates without losing any non-refundable deposits or payments. 

Collaboration

Request collaboration from the venue regarding the amount due and due dates for the cancellation. If the cancellation policy is a flat rate, ask if the hotel/venue will modify their policy to a sliding scale, and if their policy is a sliding scale, negotiate to have less liability on the line. The standard attrition rate for hotel rooms or food and beverage functions range from 80 to 100%.  Our golden nugget here is to ask for a 75% fee in liquidated damages as the total cancellation fee 0 to 89 days out from the event. The hotel or venue will most likely come back with a counteroffer, but simply asking for a lower overall fee could save you up to 25% in the instance you did have to cancel. 

Venue or Hotel Spaces & Services

You have a clear vision for your event, but does your contract align with it? Comprehensive descriptions of the venue or hotel space and the services provided are essential to avoid misunderstandings. Your contract should explicitly outline the areas to be used for the event, including any exclusive access or limitations. Additionally, clear terms on the services offered, such as catering, AV equipment, and room setups, must be included. 

Ask for identification of your event space at the time of contract signing and keep an eye out for the clause giving the hotel/venue the ability to move your event space based on their sole discretion. 

You read that right, the hotel/venue will most likely have a clause that gives them the ability to reassign your event space without telling you. We always begin negotiations by eliminating that option, but hotels/venues don’t often accept this request. In that case, if our client is still set on a particular venue, we add a contract clause that states we must be notified and approve of the relocation in writing in advance of these changes. 

Pricing & Payment Terms

Dive deep into these clauses. Are there any sneaky taxes lurking in the shadows? Understand the payment schedule and any penalties for late payments. Contracts should be transparent, avoiding any hidden costs or ambiguous language that could lead to disputes in the future. Here are two important considerations:

No Additional Fees or Services

Include this statement in your contract: “No additional fees or service charges will be incurred unless they are requested by Group and disclosed to and agreed upon by Group in the form of a written contractual addendum.” Adding this single sentence could save you down the line if you ask for something that carries an additional charge and are not otherwise notified. In our experience, most hotels and venues are honest and transparent when additional services or changes carry additional fees, but as with all contract clauses, it’s better to be safe rather than sorry. 

Cost Increase Protection

Protect yourself from cost increases and inflation of food and beverage menus for longer-term contracts. Ask your hotel/venue to provide copies of its banquet menus upon signing and include this clause in your contract: “Should menus or pricing change prior to the date of the event, Group will not be asked to pay for more than a 3% increase over the provided menu pricing.”

Hotel/venue menus are often updated each year, and cost increases typically accompany the updates. This clause will offer you the protection of paying for the cost you agreed to when you signed the contract. An additional insider tip— this can also be used to confirm the availability of a specific menu item. In addition to cost increases, with menu updates, the menu options can often change. So, if there was an entrée or dessert that you loved on your site visit or at your tasting that became part of your event vision, write it in! Make sure they can still make the entrée or menu item by the time your event occurs.  

Parting Thoughts: Special D Events Has Your Back

These are just a few of the golden nuggets we share with our clients as we confidently navigate the complex contract negotiations and deliver memorable and flawless events. Our team at Special D Events is always on your side, and we are armed and ready with the knowledge to make your next event shine. 

If you want more expert advice, you can browse our blog. Or, contact us today to schedule a consultation with one of our event planners. 

_______________________________________________________________________

Disclaimer: We make our best effort to negotiate fair contracts on our clients’ behalf based on our experience in the industry. However, we are not attorneys. If you plan to use any of the tips or tricks shared below, please do so in correlation with your organization’s standard procedures for contract review. 

Sherri Sitkauskas

Sherri Sitkauskas joined Special D Events as a Meeting & Event Manager in 2021 with experience in corporate, education, and enrichment conference, event & meeting management, employee recognition program creation & execution, group airfare & hotel contracting. Her experience spans a diverse sample of clients such as university professors, c-suite executives, college students, special interest groups, and internal event or meeting planners. Sherri joined the team after six years from the meeting and events team within the largest Travel Management company in the state of Michigan. Sherri earned a bachelor’s degree from Grand Valley State University with a focus in Tourism and Meeting & Event Management. Sherri’s unique background and experiences with meetings, events, and travel built the foundation for her role with Special D Events.
Share via
Copy link
Powered by Social Snap