Travel restrictions and geopolitical tensions are lifting driving incidents, leading to disputes between planners and hotels over contracts and compensation.
Hotel Lobby President Brett Sterenson is a live selection company that works primarily with government events and has canceled 59 cancellations so far this year. They received a total of $2.57 million in lost hotel revenue, with little commission paid to his company.
“Because of the flexibility of government contracts, many customers can cancel without fines,” he said. “Others cite force majeure. Smaller people either cannot escape the fine or are willing to pay.”
Cancellation fines should be shared
Even if hotels charge cancellation fines, Sterenson rarely gets cuts.
“When the hotel charges cancellation income from the client, I get paid for the job that leads to bookings,” Strunson said. “In most cases, I don’t.”
With record cancellations, he is pushing for some compensation. “Financially irresponsible irresponsible is irresponsible,” Strunson said.
Usually, he earns actual room income from a commission of 7-10%. “In the case of cancellation, my salary was 0%. I proposed to the property that they paid me half of what I had commissioned as a compromise,” Sterenson said.
The contract must develop
As the event industry continues to face volatility and cancellations, planners say it’s time to rethink standard practices.
“Adapting to changes in federal policy should be a two-way street. In this environment, all parties need to understand and compromise. Unfortunately, this hasn’t happened to a large extent.”
Attendance increased tension. “Renegotiating a contract is not easy, and many hotels are reluctant to consider lowering the room requirements for the contract,” Grimes said.
Tyra Warner, director of the Department of Hospitality, Tourism and Culinary Arts at Georgia Coastal College, said whether the terms of force majeure declined due to government policies depends on how they were written. “Most people are grey areas at best. Many people don’t apply. Some planners who are now signing new contracts include a new clause that specifically targets government funds or lack of funds. The remedies they offer are similar to irresistible clauses that are able to terminate liability, or if they are not liable, or, if they are challenged by governments, they still forgive performance damage in the case of performance damage,” he said.
Planners said they were strictly adhered to the terms of the contract and the hotel had limited flexibility, which had to change.
