. How a Contract Can Protect Your Group From Hotel Renovations | Northstar Meetings Group

How a Contract Can Protect Your Group From Hotel Renovations

hotel construction

"Dante's Seventh Circle of Hell" is how Dianne Davis, event producer for TulNet Meetings and Events, based in Tulsa, OK, describes a recent five-day meeting she planned. Everything was all set for this international publishing association to gather in Fort Lauderdale, FL, for a stimulating conference that combined education, networking, and discussion of topics related to the magazine publishing industry. Or so she thought. Unexpected construction issues at the property the group was meeting in led to a last-minute cancellation by the hotel. Davis, a 25-year veteran of the events industry, has run into her share of challenges, but when she turned to her contract for relief this time, she found it didn't offer the protection she needed.

Here are some of the lessons about construction clauses that Davis learned the hard way, along with some success stories of planners whose contracts protected their events from being wrecked by renovations.   

The First Red Flag
When Davis signed the contract for the meeting, she was aware of some construction going on at the hotel, but was told it would be completed well before her meeting. The first indication of a problem occurred a month before its kickoff when she learned that a terrace overlooking the ocean where a reception was to be held wasn't going to be finished in time. The hotel rep said the event would have to be moved to the pool deck.

What Davis did: She said moving the event to the pool deck was fine and went on with planning the event.

What Davis will do in the future: She knew the hotel was under construction when she booked it, so she should have added language in her contract over and above standard clauses pertaining to what action will be taken if construction is not complete in time.

John Foster, Esq., CHME, an attorney whose firm, Foster, Jensen & Gulley, specializes in the legal aspects of meetings and events, also recommends requesting a general contractor's report. "It usually comes out every month and contains the guidelines of project due dates," he says. "It will state whether a project is on target to meet deadlines or not."

Further, he says contracts should include a date, six to 12 months in advance of the meeting, whereby the group may terminate the contract without liability on its part and hold the hotel liable for cancellation if the general contractor's report indicates that the project will not be completed by the meeting dates. The hotel would also be required to assist in finding alternate arrangements.

The Crisis Hits
After the shift of the reception, things seemed to be going as planned and Davis focused on the event's menu selection, registrations, and last-minute queries from the group of 70. But then, 13 days before the event was to begin, she joined a conference call with the hotel's director of sales and marketing, a convention services manager, and her sales manager. They told her that due to the ongoing construction issue it would be unsafe to hold the meeting, and that they could not accommodate the group. An email from the director of sales and marketing followed, recommending that Davis make alternate meeting arrangements, and offering to help secure arrangements.  

"At first, I had trouble processing this," says Davis. "I was in the hotel business for 15 years and know these things happen. I know what it looks like when a scenario like this is managed right. They should have offered to pick up all the charges associated with moving to a comparable hotel." That did not happen.

What Davis did: A clause in the contract stated if the hotel couldn't accommodate the group, they could make arrangements at a sister property. Thing is, this hotel chain consists of only five properties. "I saw this language and was shocked. It shows the life of a busy meeting planner is not perfect. We miss things," she admits. "I owned it and didn't try to gloss over it."

The sales manager told Davis that there wasn't a hotel in Fort Lauderdale that could accommodate her group, but its sister hotel in Orlando had availability.

"This was unacceptable, as Orlando is 220 miles away and the group was looking forward to a beach destination," says Davis. "Plus, after running the numbers, I realized it would cost approximately $100,000 to change all the flights, many of which were international."

In addition, the contract they sent for the Orlando hotel was completely different than the contract they had in place. The food and beverage minimum at the new hotel was $13,000 more and the attrition and cancellation clauses had also been changed. To make matters worse, the hotel started avoiding her calls and emails. "We didn't have time for this as the hours were ticking down," says Davis. "I needed a solution, and fast."

What Davis will do in the future:      At this point, Davis reached out to Foster, whom she considers a friend as well as a colleague, and he gave her sage advice. "A planner's No. 1 priority in a situation like this is to explore all options to book another hotel and then figure out what damages the first hotel would be responsible to pay for," he says.

The general rule is that the party breaching the agreement is responsible for paying the other party for all increased costs it incurs to use a different hotel, he explains. Damages would also include revenue lost through lower attendance at the second hotel, if it could be proven that the change in hotels caused this, he adds.

"I also told her to keep me in the background to give advice as long as the hotel was cooperating and offering compensation. It is best to try and resolve situations like these on a customer-to-hotel level rather than lawyering up right away," he says.