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Construction and Renovation Occurring At Your Hotel During Your Event

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October 8, 2021
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Reading time: 8 min

The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.

In this video, you'll learn how to navigate your group if construction and renovation are occurring at your hotel during your event, three main areas of the construction and renovation clauses to cover + more!

Check out what Barbara Dunn (Partner at Barnes & Thornburg LLP, representing groups) and Lisa Sommer Devlin (Devlin Law Firm, P.C. representing hotels) have to say in Legalease With the Ladies- powered by HopSkip!

 
Video Transcript:
Construction and renovation occurring at your hotel during your event 

Barbara: Hi, I'm Barbara Dunn, an attorney that represents groups in connection with their meetings, travel, and hospitality contracts.

Lisa: And I'm Lisa Sommer Devlin, an attorney that represents hotels and resorts regarding convention-related matters.

Barbara: And together, we're Legalease with the Ladies powered by HopSkip. Thank you for joining us. Today's topic will be on construction and renovation and how best to address that in hotel contracts. I always say to clients that construction and renovation is terrific as long as it doesn't happen when you're there. And that's certainly the case and as much as we would expect that facilities will be maintained and updated occasionally. If that happens during the group's meeting, it can really cause a large disruption. Everything from the lobby being closed to jackhammering in the building outside to adding on. All those things are possible that can happen. So, it's something, it's a contingency that groups really need to think about. And in particular, it's really important for groups to think about those aspects of a construction or renovation project which they're concerned about which would impact their meetings.

So, when I look at the clauses and the contracts and I talk to groups, there are probably three main areas that I like to address. First, I want the group to know about the construction. In a lot of cases, the group is given a heads up or notice from a hotel as a particular construction project might begin. I know Lisa will focus on the fact that sometimes it's just not something that they'll know much in advance before a permit comes through or funding comes through but in as much as a hotel can give a group notice about construction, that'll be important. The second part is that I want to know as a group, what the hotel is going to do about it? Meaning, what's it going to do about it in terms of making sure that it's not going to disrupt the meeting or event. That will be important.

And really, the third aspect is the party is talking, the party is working together. Try to work out a resolution. You know, sometimes if it's a so-called soft renovation, if there's painting and updates, it may not be a circumstance which would be a noise and convenience or a sound inconvenience for the group to have their meeting. Yet, it's still important that the concerns be worked out. So, working through the concerns and if the parties can agree on those concerns and what will be done, great. Then, they should write it up in an amendment to the contract. If the parties don't agree, then, might be a reason that the group would wanna cancel that contract without liability.

No group wants to move its meeting but no group also wants construction disrupting its meeting. So, it's something to think about, and Lisa, I know you and I talk frequently about the fact that often construction and renovation to hotels is ongoing and it is difficult to pinpoint. A lot of times, these are things that these so-called soft renovations that many groups might not even notice.

Lisa: You're right, Barbara. We essentially agree on this. There are a lot of moving parts to this. Obviously, hotels have to do ongoing renovation and construction to keep their property up to the standards that the groups expect when they sign the contracts. The second aspect of it is, sometimes major projects are under consideration for literally years. I see contracts that say, ‘You will notify us immediately when you decide to do the renovation. Well, the hotel may be thinking about it for a very long time and it's influenced by, ownership, budgets, financing, permitting, all kinds of things. There have been circumstances where I've known hotels that have had a project under consideration for years and it literally comes together within two or 3 weeks and now, they've got a start date.

And so, when were they supposed to tell anybody? At that point, you know, it can become very, very difficult but I agree with Barbara. My hotel friends are salespeople and they're very optimistic and they always think it's gonna be great. And so, they don't want to burden their customers with telling them because they think they're going to get everything done on time. I always tell them, you know, I appreciate your optimism but you need to tell your customers what's going on and you need to tell them in detail, so that you can have those conversations that Barbara and I are talking about.

The other aspect I often see in these renovation clauses are the standard. If there's any renovation, we can cancel without liability. Well, is that really what you mean? Because if you're having a corporate event at an urban hotel and their pool is under renovation, do you really care? It's nowhere near your event. Nobody's going to be using the pool, why does it matter? On the flip side, if it's an incentive trip in Hawaii and the pool is going to be closed, that could be a big deal and so it depends on the circumstances. There aren't any blanket outcomes, and as Barbara says, it needs to be a conversation. Also, sometimes renovation is an opportunity. Barbara and I have a friend and colleague who found out a few weeks before his daughter's bat-mitzvah, that the entire front and lobby of the hotel was going to be under construction.

Instead of scrambling and trying to move the whole event at the last minute, what he worked out with his hotel is that they set up a grand entrance at the side of the hotel, hired fake paparazzi, put down a red carpet and a step and repeat and search lights and all these kids coming to this bat-mitzvah party thought they were coming to a Hollywood opening and they had the time of their life. And the hotel paid for all of it. So, sometimes, looking at this as an opportunity to do something creative is going to be a win-win. The hotel wants to keep your business and they expect that they're going to have to give some compensation to customers because of the inconvenience. So, use it as an opportunity to work something out.

Don't have a one-size-fits-all. Have that clause as Barbara suggests that requires notice and requires you to sit down and talk about it and see if it's workable. At some point, the parties are gonna agree. Yeah, this is just gonna be too much of a mess. You're gonna have to move but you may be surprised what they're willing to do to make it work for you. Barbara?

Barbara: Yeah, Lisa, I've had that same experience. Often, it's, how can I help you with your problem? It is the brass ring for a lot of groups and it is an opportunity to negotiate. Having said that, certainly, to the extent that you have jack hammering in the lobby outside the meeting groups often is so disruptive that you can't conduct business. So, somewhere in between certainly is what we wanna address and you know, many groups will tell me, no, there's not gonna be any construction or renovation because it's a brand-new hotel. Okay, maybe that's the comfort level yet we know even brand-new hotels get updates. Even brand-new hotels get new towers added to them.

So, it's always something to address. If you're ever contracting with a hotel on a pre-opening basis, so while the hotel is being constructed, it is important to build in dates in there as to when construction will meet particular milestones. And that is another strategy, especially if you go into a contract, knowing that the hotel is going to be undertaking a large renovation and that might be happening 2 years before meeting. Yet, you wanna build in some milestones as to how that progress, how that project is coming along again and whether the group would have the right to cancel without liability or to again, work with a hotel to work out concessions. So, it's something to think about. I think it's important to document in the contracts.

It's a contingency that should always be addressed but in terms of how to address it, as Lisa mentioned, I did agree with her. The best strategy is again, to know about it to know what's going to be done about it. And if the parties can't agree as to what's going to be done about it, then, the group would have the right to cancel without liability. I will say that's a rare circumstance. In many cases, the groups don't wanna cancel without liability. So, the ability to negotiate concessions is something important to really look for and negotiate in the contracts as well. And I think and finally, a lot of the items that come up are not just construction within the hotels but around the hotel. So, a major road, a thoroughfare, some major construction in the city.

For example, a lot of airports right now are under construction, major construction. In a lot of cases, whether it's construction at airports or roads or bridges leading into the hotel, or a convention center, that can add a big factor to the group in terms of timing in terms of entry of folks to and from the hotel and everything else. So, it's important to know about that. That's not to say that the hotel can control that construction. Often times, it can't but it is to say that hotel should know about that construction or interfacing with the convention and visitor’s bureau to find out more about those construction projects is really important. And that goes back to really that communication aspect of it.

No matter what you put in the contract about construction or renovation, having the dialogues about that before you enter into the contract, while you're entering into the contract, and after you enter into the contract, before you're meeting, doing those periodic check-ins and quite honestly, doing your web searches. You know, I had one client find out about a major construction project ongoing at the hotel 3 weeks before the meeting and they found out about it because of a review that a traveler had posted on a travel site. But that's not to say those are always reliable, but it was something that caused that individual to pick up the phone and call the hotel and start asking those questions. Not an ideal moment in terms of finding out before the fact but one in which the group could still work with the hotel to minimize the impact.

So, don't ever forget that it isn't just the language in that contract. It's very much so that that mindful watching and asking questions and ongoing communication leading into your meeting that can troubleshoot potential problems. Would you agree, Lisa?

Lisa: I would, Barbara. I will tell you that in my practice, I would say that the vast majority of the time when there is a construction issue, the hotel and the customer work it out and the group stays at the hotel. In terms of notifying of construction projects outside the hotel. I think that most hotels are going to push back on that because they don't always know and sometimes things happen on a very short-term basis. They will be willing to try and help you if they can if there's transportation issues or other things of that nature. Nobody should find out via the internet that there's a construction project going on at the hotel when you're going to have an event. So, I certainly agree with that and that's something hotels need to be better about.

Again, it's all that communication that's so important and finding a resolution that much of both parties that can really handle this situation rather than just going to that automatic "if there's any construction we get to cancel".

Barbara: Thanks, Lisa and thank you so much for joining us on Legalease with the Ladies powered by HopSkip. Please leave your comments in the comment box below. Thank you.


The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.

Interested in learning more about contract terms and contract clauses in your hotel contracts? 
Check out the HopSkip Contract Clause Education Center, created by Barbara Dunn and Lisa Sommer Devlin, and become a hotel contracts expert!
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