Steve Rudner's Dallas-based law firm has assisted hotels in resolving more than 3,000 pandemic-related disputes with meetings organizers this year. "We have not filed a single lawsuit in any one of those matters to get things resolved," he told a live and digital audience for today's "Back to Business Experiential Forum," held by Associated Luxury Hotels International at the Omni Dallas.
In seven instances, however, the meeting host has sued one of his clients, arguing that the event had to cancel due to Covid-19 and should not be charged cancellation fees. "Of those seven, four have already been resolved, all in favor of the hotel," he said.
This is a matter of timing, Rudner explained, adding, "We've conditioned groups over the years that the earlier you cancelled, the less you would owe, so every group is in a hurry to cancel their meeting as soon as they think they might have to."
Force majeure applies to cancellation when it is impossible or illegal to hold the meeting. But to date, "no state or city has made regulations that bar meetings from happening at any date in 2021. You can cancel at any time, but it won't be covered by force majeure unless it is impossible or illegal."
Hotel salespeople should be advising clients: "If you tell me you're cancelling today, then it's not really a force majeure and you're breaching your contract," said Rudner.
The Outlook for Hotels
Also presenting this morning was Amanda Hite, president of lodging-data provider STR, who acknowledged that the business of predicting recovery is particularly difficult in today's environment. "Every single day something changes," she noted. Earlier in the year, "we expected some smaller meetings start to happen in Q4 and business travel," she said, "and we do not expect that now. We expect to see that starting in Q1 2021."
Projections for the hotel industry's recovery also has been revised: "We anticipate that demand will recover to our 2019 levels by the middle of 2023," Hite said. "That sounds sort of depressing, but the positive news is that by the end of 2021 we will have recovered 81 percent of the demand from 2019."