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Bye-bye Buyer's Market

By Jillian Fehrenbach on Oct 3, 2016 in Group Travel, Incentive Travel, Individual Travel

In case you haven't heard, we're no longer operating in a Buyer's Market. Those days are long gone and won't be returning anytime soon. Flexibility and the willingness to eliminate certain clauses have gone by the wayside, only to be replaced by stiffer attrition and cancellation penalties, not to mention higher rates. And that's if you can even find space over your preferred dates! There has been little to no new hotel development over the past 2-3 years, and that is only adding to the problem.

All is not lost, however. It's still possible to do some negotiating when it comes to contracts--it just takes a bit more time and a lot of attention to detail. A few key things to keep in mind. Hotel companies are consolidating at a rate that is only outpaced by airline consolidation.  Flags are changing and there are fewer owners with lots more hotels in their portfolios (i.e., Marriott acquiring Starwood). It's a good practice to include a "change of ownership or management" clause in contracts. Such a clause can allow the planner the option of cancelling the program without any financial obligations if the hotel changes owners.

With the increase of political unrest, terrorism, unstable weather and disease related disruptions throughout the world, it is wise to consider adding the verbiage "in whole or in part" to force majeure clauses. Typically, we think of this clause coming into effect when the entire program is cancelled, but by adding this wording, it might help eliminate some attrition fees if, say for example, some of your attendees were prevented from attending a meeting/incentive due to strikes or weather conditions in their part of the world, even if those conditions weren't in effect in the location where the meeting was to be held.

For more information, check out this article from Successful Meetings magazine September 2016 edition.  

And if you'd like to learn more about how we protect our clients through our contracting and risk management processes, just give us a call.