During negotiations between meeting planners and host hotels, a room contract is a standard part of the agreement. The hotel agrees to block off a predetermined number of hotel rooms in exchange for the planner guaranteeing payment for the number of requested rooms. A standard hotel contract includes a group reservation cancellation and reduction policy that binds the organization to pay a fee, commonly referred to as an attrition penalty, for every room that does not get booked. A seasoned meeting planner knows one way to reduce liability and avoid hotel charges is by including room block reduction dates. This allows a planner to cut a predetermined percentage of rooms from the original group reservation block before the event.
Though these numbers aren't written in stone, the hotel typically expects the organization to fill 80% of the rooms agreed upon in the contract. It's up to individual planners to negotiate the terms. Planners may have hotel reservation reduction dates written into the contract. For example, if the meeting is not booking as quickly as anticipated, the organization can reduce their block by 10% 60 days before the conference commencement, and another 10% 30 days before. After 30 days or the specified allotted time, the organization must pay for any hotel rooms not booked by attendees. The hotel industry standard rate of attrition is 75% of the cost (plus taxes if bound by law).
In addition to developing a group reservation contract exit strategy, meeting planners now have the option for hotel cost mitigation by using Roomer for allocating hotel rooms. Instead of incurring the unnecessary costs from hotel charges, book the unused group reservations you've already paid for by listing them for free on Roomer. If it doesn't sell, you owe Roomer nothing. If you book the room, you'll pay Roomer a fraction of what hotel fees would have cost. You avoid penalties. The hotel fills an otherwise empty room. And the customer gets a good deal on where they want to stay. At Roomer, we like to call that a triple win.