How to manage hotel contract commitments for hybrid meetings
How to manage hotel contract commitments for hybrid meetings. How do you manage space commitments in your hotel event contracts?
This is Part 5 of a series of posts where we will be sharing transcripts from our "Looking Forward" webinar featuring Legalease With the Ladies- powered by HopSkip.
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If we have signed venue/hotel contracts with significant space but don’t end up needing all the space due to shifting to a hybrid meeting, should the venue work with us on releasing/not charging the full rental amount?
The first thing you have to think about is, you have a contract, you have a commitment. So, when you say, “should the hotel”, they are not required to amend that contract, they aren’t required to do anything. But will they? I would think so. You know, at this point, hotels need business and they are anxious to have any kind of business that they can. So, they want to work with you to create whatever event can happen and as I keep telling people, some business is better than no business.
Now, there are realities involved in that. For a hotel to open its doors, if it's been closed for several months, they have to have enough cash flow in order to bring back those employees, to turn on the air conditioning, and do all those things that are needed to operate and host that event, so there's a fiscal side of it that's very important. The question is a very valid one. If suddenly, the group only needs half the space, what's the hotel going to do with the rest of that space? Sit down with your hotel partner and say “Here's what we're looking at and here’s what we are considering. How can we make this work?”
I know that I have some clients that are doing unique offerings where they're saying if you can't have your huge event in Chicago, then maybe you book several smaller hotels, one in Omaha, one in Saint Louis, one somewhere else, and have a smaller event in each one of those that are linked in a hybrid meeting. Then everybody's getting some business. There are all kinds of ideas out there but you must have a conversation and I think you're going to find that at least for 2021, hotels are going to be very willing to be flexible to the extent that they can. Barbara, what are you seeing?
Yeah, absolutely. I agree with you, Lisa, and having the conversation as you mentioned is important. So, if you're looking at meetings throughout the fall, for example, have the conversation now with your board when your leadership is still mulling the options- that's the time to start having the conversation with the hotel. Ask about flexibility and as with any renegotiation, come to the conversation hat-in-hand. What can you provide the hotel? Can you guarantee your group will return again? As Lisa mentioned, there’s a number of creative strategies for how to manage it.
I will say the obvious, for hybrid meetings, we're often looking at twice the cost from the group side because you have your fixed costs of being on-site and you have the cost of being virtual. So, it's not to say it shouldn't be done, but you know between the cost side of it and everything else, it may be something that the group is unwilling to do. I also think the term “hybrid” is a little misconstrued in some cases because often it's not a circumstance where we're completely replicating the whole event virtually. It may be portions of the event, so that's also something to think about as well.
One thing to keep in mind, if you are to amend the contract and you're really significantly changing everything, my recommendation is to just do one clean contract and sign off on that. That is much better than having a patchwork quilt of amendments that you'd have to read later on.
Barbara and I have both had situations where we've got three or four different amendments open on our screens or on our desk, and you're trying to see where point A and point B and Point C went through that chain. And at some point, you've gone so far from what the original event was, it's better to just start over and have a document that says “this original contract is now gone, neither side has broken possibility, and here's where we're starting over.” I think that makes a lot of sense, especially in this new environment.
This post is a multi-part series where we will be sharing the questions and answers that were originally generated from HopSkip's recent "Looking Forward Webinar" featuring Legalease With the Ladies. You can download the recorded webinar here.