These days, many hotel contracts include “performance clauses” which can prove costly for groups if the attendance is lower than expected. The most common clause is for “room attrition,” meaning the money that the hotel is losing when a room is reserved and then not used. So groups need to be cautious when picking how many rooms to block and on what nights. Most hotel contracts will hold the group responsible for rooms that aren’t sold below a certain percentage, usually 75-80%.
Attrition is determined by the cumulative room pickup or by the total amount of room-nights sold during the length of the event. A good hotel contract will not include an attrition clause, or even a food and beverage minimum. To deal with hotel contracts it’s best to consult a professional; it’ll save you a lot of money. Events that need less than 50 rooms are more likely to avoid attrition clauses.
Larger groups may have to sign a contract with a room attrition clause. Groups should know how many rooms were sold at their last event and plan accordingly. You should also agree to attrition that’s more than 75%. And remember, it’s always a good idea to talk to a professional before signing any contracts.