Page 11 - MRN Winter 2018
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Military Reunion Network | WINTER 2018 | #militaryreunionsmatter
THEATTRITION
CLAUSECONTROVERSY
In our Basic Training class, I ask the question, Attrition was first included in contracts back
“What are hotels selling?” Hearing many answers in 1996. The International Women’s Bowling
related to service, amenities and physical space, I Conference booked a Hyatt hotel. They contracted
challenged the class to consider a different answer, rates and room blocks. Between contract signing
“Time”. Hotels are selling time. They can’t sell and the event, attendees were either invited by other
September 20th rooms on September 21st. They hotels or searched for and secured accommodations
must take advantage of the weeks and months elsewhere. By the time the conference arrived, there
leading up to the 20th to sell as many
rooms as possible at the right rate. If was little time for Hyatt to shift
a planner says they are going to need gears and make up the rooms left
75 rooms of a 100-room hotel. The empty. They went back to the IWBC
sales efforts turn from the requested and requested the money for the
reunion dates to other times of the rooms that were contracted but not
year, because those 75 rooms are utilized. IWBC responded that they
anticipated to be filled each night did not owe Hyatt. They ended up in
for the length of the reunion. It all court. What resulted was an industry
sounds great on paper but then life happens, and shift for a clause to be included in
potentially, so does attrition. contracts to state what will happen if a planner does
not use the rooms they contracted for. Remember
The Events Industry Council defines attrition as hotels are selling time.
follows: For years, many reunion planners have said, “If
there is an attrition clause, I am going somewhere
“The difference between the actual number of else.” Their logic was to avoid potential damages.
sleeping rooms (or food and beverage, or revenue) It makes sense. Why sign a contract that forces an
realized and the number agreed to in the facility’s organization to pay additional fees? But signing a
contract. Usually a percentage or actual shortfall limit contract that has no mention of attrition at all does
is allowed before damages are assessed.” It comes not necessarily get a planner out of paying it. If you
into play when there is a significant difference agreed to buy rooms and, in the end, didn’t need
between what is requested and what is utilized. From them, the hotel could request payment to cover the
a hotel perspective, one or two rooms is manageable, difference. Hospitality contracts experts and industry
thirty to forty are not. Attrition is the one contract attorneys agree, there must be language in the
clause that splits the industry right down the middle. contract to state what happens if the rooms requested
Planners refuse it. Suppliers need it. Love it or hate it. are not utilized. It is not the presence of the clause but
Attrition is not going away. How does a reunion ever the language that planners should object to.
move forward when there is so much angst? How do Hotel contracts cover two things. First, what is
we find common ground where both parties feel their supposed to happen (what you agreed to, ie getting a
interests are protected and supported? The answers banquet room on a Friday at 5:30pm). Second, what
follow but first some history.
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