Ultimate Guide to Avoiding Hotel Attrition (or at least reducing it)
If your business involves events of any kind, you likely know the crisis of hotel contract attrition. If you haven't encountered it, then let us save you some real heartburn and a lot of money. Read on.
Hotel attrition (AKA 'performance") is a clause in hotel contracts that obligates the client to pay for unsold hotel rooms based on a sliding scale - typically 80% of the room nights you contracted. A room night is defined as one room x one night = one room night. Some may even include anticipated revenues from catering and outlet revenues on top of the unsold rooms.
Hotel attrition bills can easily reach into tens (or hundreds) of thousands of dollars for your organization. What about hotel cancellation penalties? Even more devastating.
We've seen many unsuspecting clients who have no idea the attrition is even in their hotel contract. They think their date to release rooms (AKA the "hotel cut-off date") means that they release the rooms and are under no further obligation. Even the savvy may think that, if the hotel sells out and fills those rooms, they aren't obligated. Think again.
Are you sweating yet?
You need to know absolutely everything about your hotel contract language before you sign - on top of all the other things on your to-do list. Quite simply, hotel attrition can devastate your event financially, and maybe cost you your job.
Hotel's don't like billing for attrition either, they'd much rather have those rooms full of guests - but make no mistake hotels (like all of us) are in the revenue business. After all, you are asking them to take their very valuable hotel inventory off the public market for your future use.
Savvy planners may be able to lower the attrition risk but it is almost always there. BTW even if hotel attrition isn't specifically mentioned in your contract the hotel may be able to bill you (here's a great article that proves that point). Mitigating hotel attrition is nearly impossible once that contract is signed. Some hotels are now even restricting you contractually - not allowing you to resell those rooms you are obligated to fill on the open markets that have popped up for that purpose.
OK hotel sales people, don't panic and hate us for this. We aren't advocating avoiding hotel contracts all-together. We love our hotel partners. Ultimately STAYKER can help alleviate the attrition nightmare for both parties.
Here (in our experience) are the Do's and Don'ts of at least minimizing your hotel attrition:
DO: Have a heart-to-heart with those who would be writing the attrition check before you sign anything. Assess the risks and contract only for the room nights they agree you truly must provide to your customers, staff and speakers etc. Assess the risk if you do the unthinkable and cancel. That may sounds like common sense but if you do it right, it's everything. If you are going to sleep at night, you better be at least 80% sure you will fill each of those rooms on every night you block them before you sign (because they will still wash 20%). Remember, using STAYKER will provide you access to the hotel's rooms for anything other than the guaranteed rooms you must have without losing any sleep.
DO: Assess the market. Unless your event is over a completely sold-out date (think Comic-Con) you can get hotel rooms. Yes. STAYKER says so.
DO: Assess your customers booking patterns. Forget blocking rooms for those who book after hotel cut-off or who will likely book direct around your block (hotels are spending millions advertising to get these bookings). Again, STAYKER will make sure you have rooms to sell at competitive rates after hotel cut-off.
DON'T: Think about your rewards points, or the comp room the hotel may give you. Rewards for group contract bookings are the devil's workshop and they aren't worth the ultimate cost. Many in the public sector will no longer get points from companies like Marriott anyway. Don't believe us? Read it here under Section 5.0 of the new Bonvoy event rules.
DON'T: Believe any verbal promises that lead you to believe the hotel will not charge you attrition. Trust us. We love hotel sales people but they have sales goals that are only met when you sign that contract with a big commitment in it. They won't be writing that attrition check (heck, they may not still be working there by the time your event rolls around).
DO: Give your hotel salesperson the nifty STAYKER report of all the bookings you got through our platform so after the event both of you get credit.
DO: Sign up for Stayker for FREE. Give us the chance to save you money, time and sleep. If you use our booking platform and the steps above there will be no more attrition. Period.