10 key hotel addendum clauses to mitigate risk & loss. 1 just saved me 42K.

You know when you get to work sometimes and you can’t recall any of the details of the ride? So numb to the repetitious voyage that you no longer take notice of your surroundings until you put the car in park. Your eyes repeatedly blinking you back to reality, realizing you have arrived as if teleported, and apparently having listened to a Minnie Mouse serenade the entire 30-minute trek. #true story #workingmomlife

This was the same sense I experienced from our contract addendum process until it saved my organization $42,521.50.

I had just signed a contract with a hotel for an annual conference when I got a call that they needed to cancel and if I could please negotiate the contracted cancellation fee.

“Let me see what I can do.”

I slammed some coffee and re-familiarized myself with the contract. Room rate blah blah blah….check-in/check-out blah blah blah….policy…blah blah blah…addendum…hmmm addendum…that’s a funny word….addendum…addendum…ADDENDUM!!!!!!! Holy Hannah, the addendum!!

Page 2, paragraph 8….

“By Federal Law, XYZ Company or Affiliates retains the right to opt out of any contract within 72 (business) hours of signing said contract without penalty.”

The sweet meeting planning gods have shined down on me! The contract was canceled, the customer paid zero, and this meeting planner looked like a hero.

I felt far from a hero. I should have known better! I had become entranced by the creative and more glamorous details of the job, I underestimated the importance of this crucial step. Like my morning commute, it was just another day of going through the motions on auto-pilot.

If that ONE clause could save me $42K what other sorcery did this 5 page document possess?

I went through it line by line and chewed on every word letting it all digest. My yellow highlighter at the ready to expose its mystery. Sometimes getting so hypnotized by the melody of each paragraph I would get lost in its syncopated rhythm. Reading it again. And again. And again.

Happy to say, I now bring it forth to every negotiation with intent and confidence.  I also now home office, so you are safe from me on the roads 😉

If you don’t use one, I encourage you to GET ONE! Hotel contracts are not a one-size-fits-all document. Although you may have made it this far without issue, complacency is dangerous. Be proactive. Talk to Legal. Talk to procurement. Don’t leave you or your company exposed and vulnerable to financial risk and liability.

If you do have one, read it! Really READ IT until you understand all the ways it protects you. Confirm that it is up to date and is the voice for what matters most for your organization or client, bringing your interests to the forefront.

Here are 10 contract addendum clause standouts that I personally love (in no particular order) packed with potential to save your organization money and help mitigate any future risk…

1. the obvious star as mentioned…
By Federal Law, XYZ Company or Affiliates retain the right to opt out of any contract within 72 (business) hours of signing said contract without penalty.

2. INTRO:
…This addendum, when signed by both parties, constitutes a legally binding agreement and an addendum to the enclosed contract and the parties agree to be bound by its terms and conditions; provided, however, that where the terms of the enclosed contract and the terms set forth below are inconsistent, the terms set forth below shall govern.

3. ATTRITION:
…In the event the hotel is able to resell canceled space for another food and beverage function or the group adds other functions thus generating replacement food and beverage and/or meeting revenue, the damages will be reduced by the same amount of profit generated from those functions.

4. CANCELLATION
…If XYZ Company or Affiliates must cancel a meeting after the contract has been signed by both parties, no cancellation penalty or liquidated damages will apply if a meeting(s) generating 95% of the same profit is confirmed within one year of the original meeting dates at the originally contracted property or an affiliated property.

…Any room nights resold by the Hotel will be credited towards reducing any obligations, which XYZ Company or Affiliates may have incurred.  XYZ Company and Affiliates will not pay a cancellation or attrition fees until after the meeting dates when audited proof that rooms remain unoccupied is received.

5. COMPETITION
…Once a contract is signed, the hotel agrees not to contract any meetings sponsored by a competitor over the same dates unless consent is received from XYZ Company or Affiliates.  If consent is not obtained and an unresolvable conflict is determined, XYZ Company or Affiliates may withdraw its reservation and will not be subject to any cancellation fee.  Competitors include….

6. FORCE MAJEURE
…In the event XYZ Company or Affiliate’s decides to hold its Meeting despite Force Majeure circumstances, the Hotel shall waive any fees related to a reduced-sized Meeting (including any room and food and beverage attrition fees and any function space rental fees) and shall offer the XYZ Company or Affiliate’s guests any lower room rate offered to guests during the contracted dates.

7. CONSTRUCTION, REMODELING, AND RENOVATION
…If such construction disturbs the conference as a whole the Hotel agrees, without arbitration, to reduce the master account by 25%.

8. ON-SITE STAFF DISCOUNT
…Hotel agrees to provide XYZ Company or Affiliates up to six (6) staff rooms at 50% of the group rate for the entire stay of the staff member.

9. FOOD AND BEVERAGE
…Final count guarantees will be required no more than 72 hours in advance of the specific event and will allow a 5% variance above or below the guarantee.

10. ROOM RATE
…The hotel certifies that no lower group or special promotional rates are available for the same or better room types during the period of occupancy by XYZ Company or Affiliates.

Hope it helps! Now go look like a hero…

Eventfully, Angela

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A Chicago native, Angela is a self-proclaimed event geek and celebrator of everything. E-V-E-R-Y-T-H-I-N-G! She currently resides with her husband and 3 kids in the Atlanta, GA area and has been the Sr. Meeting and Event Planner for Ingersoll Rand, a global Industrial Company, since 2009. She recently debuted her blog, Eventfully Angela, writing about industry tips and the overall musings of her eventfully crazy life as an event planner and beyond. She can also be found sharing event industry eye-candy on Instagram @eventfullyangela. Thoughts and views shared are her own.