The next time a venue contract lands on your desk, read it twice. First read and highlight any areas that don’t make sense or may need to be adjusted. Then, read it for what clauses are not in the contract and need to be added. The following checklist will help you determine what to look for and to understand what is missing.
General Contract Issues:
- Complete names of all parties (both host and planner), addresses, and contact information as well as the correct name of the conference.
- Be sure the contracting party is not listed as the name of the conference; they are often not the same.
- Actual dates of the conference including set-up days.
- Statement of whether the contract is a first or second option. A first option should specify the date by which the contract must be signed and returned to the venue. A second option should include the above, as well as the date by which the venue must notify you of its decision.
- When you receive a first option agreement it should be a contract, not just a proposal.
Sleeping Room Block:
- Ensure arrival and departure dates are noted.
- If “shoulder nights” (days immediately before and after the conference) are needed, ensure they are listed in the contract with the same rate.
- Specify breakdown by type(s) of rooms/suites and number(s) per night (if you or the client has collected a history of actual nights from past conferences, base your room block on these numbers).
- Require room block numbers to be counted cumulatively - the total number of nights are considered when calculating pick up for attrition and concessions.
- Beware of attrition clauses that lock you into payment for the entire contracted block, the contract should allow for a percentage of rooms that you will not pay for (ideally 20-25% allowance).
- Be aware of release dates, block cut-off dates and penalties related to each.
Sleeping Room Rates:
- Specify rates by room type (e.g. single, double, deluxe, suite, etc.), and the number of each type within the block.
- Ensure applicable taxes (sales, occupancy, resort, extra amenity) are outlined.
- Ensure applicable charges for extra person(s) in the room are outlined.
- Clarify inclusions: breakfast, health club access, daily newspaper, internet, etc.
- If the contract was initiated in another country, rates are usually quoted in that country’s currency, use an exchange calculator to convert the rate to USD.
- If commission is included in the contract, the contract should outline the commission percentage, and who it is paid to.
- Negotiate complimentary rooms based on room block; standard comp room rate is one complimentary room per 40 or 50 revenue-producing rooms actually utilized. Determine whether the comp rooms can be credited to the master account. Comp room nights should be based on the cumulative pick up for the contracted rooms.
- Determine if additional comp rooms will be extended to convention staff and / or guest speakers, or if a special “staff or student rate” will be given.
- Determine how many VIP upgrades will be given to the group.
- Determine how many VIP amenities will be given to the group.
- Identify other concessions that might be important to the group (e.g. complimentary sleeping room internet, free parking, discounts on meeting space internet or A/V, etc.).
- Outline complimentary site visit rooms – number of rooms and how many nights for each (“room-nights”) will be made available to the host and planner.
- Specify method of reservations (individual call in, rooming list, internet link, PassKey, third party or a combination of these). Identify call in telephone number and internet link, as well as group discount code to be used.
- Identify cutoff date – usually 4 weeks prior to the primary arrival day. Indicate whether reservations received after the cut-off date will be honored at the group rate, or a rate at the venue’s discretion. Note: a closer cut off date is a good negotiation point.
- Specify when / if reservation confirmations will be sent out by the venue.
- Specify check-in/check-out times.
- Dishonored reservations: clear outline of compensation the venue will make for conference guests that are “walked” (e.g. free sleeping rooms at a comparable venue, free transportation to and from substitute venue, relocating back to property at earliest available date, etc.). Note: Contracts can state that the group WILL NOT be “walked”.
- Outline reservation cancellation policy.
- Specify which charges the host organization will pay for and which individual attendees will be responsible for.
- Specify advance deposits required by the venue, and the due date(s). For individuals, a credit card guarantee or one night’s deposit is often required.
- Determine procedures and timelines required by the venue to set up direct billing.
- Specify authorized signatories and payment terms.
Function Space and Meeting Arrangements:
- List detailed space requirements including exact days, times, setups, and functions.
- List specific room names or a minimum square footage required.
- Determine exact date when the venue will provide definite room assignments and include a note that rooms cannot be changed beyond that date.
- Outline terms for releasing space, if necessary.
- Determine venue’s criteria for waiving meeting room rental fees (waiving these fees can be included as a concession). Set firm price for space rental, if applicable.
- Determine if there is a fee for “extensive” meeting room setups, and how that is defined.
- Clearly outline any charges for rental of rooms, furnishings, linens, airwall pulls, air conditioning (especially for exhibit halls), security, trash collection, etc. Note: Be aware of any information regarding damage to space or restrictions on hanging, etc.
- Identify charges for room turns or last minute changes to set-ups.
Termination for Cause:
- Under what terms can the agreement be terminated, in the event of an emergency over which no party has control (also known as an “Impossibility” or “Force Majeure”)? It is best practice to list all forms of emergency (e.g. terrorism, pandemic, natural disasters, etc…) in order to help ensure the venue will allow you to cancel without damages. Terms should be mutual and state that termination will be without cancellation or damages charges.
- Termination should be allowed for construction, change in venue management or ownership, bankruptcy, or the conflicting booking of a competitor.
- Ensure “without liability” is included in these clauses.
- By the group: ensure a sliding scale of charges, as well as mitigation costs for each timeframe.
- By the venue: the group should be compensated for all losses associated with the cancellation.
- Watch for cancellation clauses that seek to recoup all revenue that the venue would have lost (e.g., restaurant revenue, gift shop revenue); damages owed should be in terms of lost sleeping rooms, meeting space rental, and food and beverage revenue only.
Americans with Disabilities Act:
- Venue should warrant its compliance with current ADA requirements.
- State mutual cooperation in identifying needs and notifying attendees.
- Beware of vague language and one-sided obligation for the group.
- Determine what method will be used – arbitration, litigation or mediation. If arbitration is chosen, parties should reserve the right to use courts for equitable remedies. Specify the State in which the proceedings will take place.
- Determine who pays attorney fees (in the event the venue sues the group for collection of funds the group owes, the venue may want to be reimbursed for it’s attorney fees).
- Indemnification should be reciprocal and each party should be responsible for its own negligence.
- The venue and group should both agree to carry adequate liability that protects both parties against claims arising from activities in the venue during the event. The venue may require that the group provide a Certificate of Insurance (COI) to the venue to ensure compliance.
- The venue should warrant the condition of the facility. It should be the same or better than at the time of the onsite visit or contract signing.
- The venue should state its adherence to laws regarding fire, safety and health codes.
- Make sure titles are used when authorized parties sign the contract on behalf of their organization
- Determine whether an electrictronic copy of the signed contract is valid.
- Outline the use of outside contractors and whether or not a fee will be assessed.
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