Event and hotel contract guide for company retreats
Event and hotel contract guide for company retreats
Sara Iannacone · 3/09/2023
Every event comes with multiple contracts. From the venue to speakers, hotel blocks to dinner reservations—what do you need to know about event contracting for your team offsites, onsites, and client events? Today we’re sharing all the essentials.
The world of event contracting has done a total 180° since the pandemic. Hotels alone lost nearly $112 billion in revenue during the pandemic. That loss, paired with staffing issues, has made contracting a little bit more difficult than in years past. Planners everywhere are struggling to navigate higher rates, new “mystery” fees, more difficulty in negotiating contracts, and delayed responses due to labor shortages.
While event contracts are critical to protecting your business when hosting company events, they’re not a particularly fun part of the planning process. But after negotiating hundreds of contracts during this tumultuous time, our team has some tips for what you need to look out for when executing your team offsite contracts.
These can be used for vendors, venues, speakers, entertainers—anyone providing a service to help you plan and produce an epic offsite or client event. Ready to take some notes?
Understanding the Event Contracting Process
It may seem the event contracting is as simple as choosing a venue you want, picking your dates, and voila. This makes sense when booking as an individual, because it’s super simple to go online and choose what you want, put your credit card information down, and call it a day. But in reality, if you want the best rates and terms for a group event booking for your team offsite, it’s much more involved than that.
A solid event contracting process has five steps:
Step 1: Search
In this step, you decide the areas you’d like to search for venues, caterers, hotels, etc. It’s a good idea to choose multiple metro areas so you can see which area provides the most value and see how they compare.
From there, you or your event planner will put out a request for proposal (RFP), with items including:
Your organization details
Desired meeting dates
Estimated attendance
Space requirements with type of setup desired
Guest room requirements
Tentative event agenda with catering times
List of concessions a venue or vendor may offer
Alternative date patterns
Request for nearby attractions and activities
Initial negotiations on things like attrition (we’ll get into terms in a bit… sit tight)
Typically, you can give the sales teams at a venue anywhere from three to seven business days to respond. Since the pandemic, teams are still short-staffed and dealing with talent shortages, so it does take a bit longer to get responses than pre-pandemic. This is why we recommend planning early!
Step 2: Shortlist
Once you receive all the responses from all the vendors you’re comparing from your event, it’s time to see how they stack up against one another. Choose around 3 final options that you can go and negotiate with to try and leverage other RFP responses and get better promotions and terms. Typically, this would be your top choice venue, as well as a couple of venues that are close in comparison and offering incredible rates and concessions.
Step 3: Negotiate
Now, a lot of people will only negotiate once the contract from a final choice venue is in hand. But, if you’re doing that, you’re leaving money on the table in a lot of cases.
Go to the venue or vendor, and say, “XYZ vendor is offering…” and list out their RFP terms. Then, ask if they can come closer to meeting the other vendor's offer or what they can offer to make their response more competitive for your event.
Step 4: Choose
After a couple of rounds of initial negotiations, you should have best and final offers from your vendors. From there, choose which best aligns with your team offsite goals and desires and send off a contract request!
Step 5: Contract
Once you have a draft of the contract in hand, it’s time for more negotiating. You should never sign a contract as-is. There are clauses you should add, and things you should continue to negotiate with the final property. Then, once you’re 110% comfortable with the terms, you can sign on the dotted line.
Now, you may be asking, “What do I even look for when I get to this point?” That’s what we’re covering next…
25+ event contract terms and clauses you want to advocate for
Here are the most popular and important terms and clauses for team offsite contracts. Now, depending on whether you’re hosting at a co-working space, a hotel, or an event venue, some of these clauses may not be applicable. But it’s important to at least consider these to protect your investment!
First, you want to see if they’re outlined at all. If not, try to get them added during the contracting phase. If they are, we’ll share what to look for and negotiate.
Additional spend
This clause ensures that there are no hidden fees charged to the group that aren’t outlined in the contract or agreed upon before charging. This could be something like resort fees, gratuities, labor fees, etc.
Administrative charges/service & labor charges
Since COVID, administrative charges are almost inevitable when it comes to hosting an event at a venue or hotel. This is typically a taxable charge that ranges from 18-28% and is charged in addition to gratuities. You do want to make sure if these are in your contract, they are “guaranteed [X]%” depending on your agreement. This way, they can’t increase the percentage when you get on site.
Inevitably, these charges are going to hike your bill immensely. We always try to negotiate a lower percentage—some venues will, others won’t. It depends on demand, time of year, corporate management policies, etc.
Ancillary services
While this clause is traditionally used for additional audio-visual support, it could be used for any support your organization needs from the venue to produce your event. This may cover things like power drops, access to loading docks or elevators for designers coming in for a client event, etc.
Attrition
This is one of the most important things to negotiate on a hotel contract! Attrition is the amount of allowable slippage in the room block that you book.
For example, if you have a block of 10 rooms with 20% attrition, that means that you need to block 8 out of 10 rooms to not get charged for rooms you’re not using. If you only book 7, you’ll be charged for that 8th room even if you’re not using it.
Standard attrition is 10%. But many hotels will negotiate up to 20% if they’re trying to earn your business.
Bankruptcy or insolvency
Many hotels and venues won’t have this clause, but it will protect you if they claim bankruptcy and go under. Similarly, if your organization claims bankruptcy, the venue or hotel can be canceled without liability.
Cancellation and cancellation by venue/hotel/restaurant
Every event contract, whether it’s a venue, a speaker, a vendor, will have a cancellation clause that defines what happens if you cancel. Fair. But what isn’t fair is if they don’t have a cancellation clause that addresses what happens if they cancel.
This should outline the damages you receive if a venue or vendor cancels. For example, is there an alterate speaker who would be taking their place if they themselves can’t make it? Or with a restaurant, what are they doing to help you find a similar priced / sized place for your team offsite dinner?
Catering guarantees
This is a clause a hotel, caterer, or venue will include to denote the minimum number of guests they’re agreeing to serve. Similar to attrition for space, you want to make sure this number is a little cushy in case your team members aren’t able to attend. We like to plan for a guarantee 10% lower than what we anticipate for actual numbers.
Usually, you’ll have to report final numbers to your vendors a week in advance and then fully confirm 72 hours in advance. But this will depend on the caterer or venue.
Catering service standards / Performance of hotel / services
Since COVID-19, staffing and labor have been an issue for venues, hotels, and caterers everywhere. But you want to ensure this doesn’t impact your event experience. Not all will add this clause, but you can request things like
One server for every 20 guests if you have a sit-down meal
One bartender for every 100 team members on-site
All outlets and restaurants on-site must be open
Wi-fi needs to be operable in all areas of the property
And note that if this isn’t executed, you may seek remedies for non-performance.
Change in management company, ownership, or franchise affiliation
Often, if companies change management, policies and service levels can change. So, you want an opportunity to break the contract if this is the case. Put a clause like this in to protect your investment and have flexibility should things change! This is much more common in a post-COVID events world.
Changes, additions, stipulations, or lining out
Ensure that the contract outlines that any changes need to be agreed to in writing!
Concessions / adjustments to concessions
Concessions are important for the overall value of the contract! These are essentially bonuses that the venue, caterer, or hotel will give you for booking with them. It could be anything from free parking for the week to free shipping/ handling to comped suites or rooms if a certain number of rooms are booked.
This is another reason why it’s good to have a third party with experience handle your contracts because they know what concessions are standard and should be offered!
Damage to function space
Many venues will have this clause, placing liability on the organization should there be damage to the room by attendees or contractors. Try to minimize this to damage that can be proven was caused by the team, not contractors.
Food and beverage minimum
This applies to caterers, venues, and hotels. It’s a minimum spend for catering. In many cases, you can negotiate complimentary meeting space as long as you meet an agreed-upon F&B minimum.
Force majeure / impossibility
We’ll keep this one simple. Don’t sign a contract if there isn’t a force majeure clause! This is how many people were able to recoup their investments during the pandemic. It outlines that if by an act of God or something completely out of control of either party happens, no one is liable.
Indemnification
A pretty standard clause for compensation for harm. The key here is to make sure that the clause is mutual indemnification, not just one-sided.
Lowest group rate
This is traditionally on hotel contracts but may work for co-working space contracts as well, depending on how large they are and how many groups they can host at the same time.
This means you’re getting the lowest room rate or venue rental rate available, with the exception of outstanding negotiated contracts. So, your group can’t go online and book at a lower rate.
Master account / individual pay own (IPO)
The master account is essentially your group’s bill at a hotel. Many hotel contracts will have you dictate whether the following will be paid by individuals or be charged to the group master account:
Room rate
Incidentals (anything consumed in the room like mini-bar or long-distance phone calls)
Catering
Meeting space charges
Audio visual equipment/ labor
Porterage/ room drop fees (we love a welcome gift!)
Most companies put the entire event, with the exception of individual incidentals, onto a master account.
Noise abatement / enjoyment of meeting space
Add a clause noting that your team must be able to enjoy your meeting space without interruption!
Porterage
Some hotels will try to require porterage, which is a bellman fee for bags to be brought to the individual’s room. Try to get this waived.
Rebooking
Having a rebooking clause can help you avoid cancellation fees. Note that if things change, your deposits will be applied to a new date within 12 months of the originally contracted dates.
Relocation
Having a rebooking clause can help you avoid cancellation fees. Note that if things change, your deposits will be applied to a new date within 12 months of the originally contracted dates.
Renovation
Have a clause that notes if renovations are taking place, the group needs to be informed and will have the opportunity to break the contract without fees, should it directly impact the team offsite.
Security
Some larger venues may require security. Try to negotiate a lower minimum number of hours or get this removed altogether for a small team offsite.
Shipping & storage
Many clients go into their first event thinking that the hotel will allow them to ship for free. Unfortunately, that’s not the case in many scenarios. While you can negotiate a certain number of shipping and handling and storage fees within concessions, you will typically have to pay for a large number of boxes being shipped on-site. Rates are typically dictated by weight and/or box size, starting at $5.95 per box and up.
Try to negotiate a minimum of 25 boxes for free. In many cases, this should be enough for your team offsite materials!
Use of outside vendors
If you’re booking a hotel or venue, there is a chance you’ll want to bring in an outside audio-visual team or design team. Make sure in your contract it’s noted that you’ll be doing this, and ensure fees are outlined explicitly.
Many venues will charge you to have a “shadow,” someone from their team overseeing the external vendors, or charge a flat fee for using an outside vendor. These can start at about $2,500/ day depending on the market.
Wi-fi / internet access
Especially if you have co-working on your agenda, you need sufficient wi-fi access. Put a clause in that ensures a specific download speed and/ or number of users.
For hotels, negotiate complimentary wi-fi access in guest rooms if the hotel doesn’t already offer it.
Other Contract Considerations
Now, while it may seem like this is an exhaustive list, there are things you’ll want to consider depending on the type of contract and you may need additional clauses for protection.
For example, for speakers, you’ll want to outline deliverables in the contract, like when they need to have a presentation sent to you, when it’s expected they’ll arrive or log on to present, and how long the presentation will be.
The key is to think about every little detail / deliverable and make sure it’s covered in the contract.
The reality of event contracting
As you can imagine, to get favorable terms and ensure your company is protected while hosting incredible team offsites and retreats, it can take hundreds of emails back and forth between sales managers and legal teams. This is on the venue and service provider side, as well as your internal side for your point person.
This is why many of our BoomPop clients prefer to contract through our Event Designers. You deal with one contract, and they handle the rest. It takes out the immense amount of negotiation legwork that comes along with each individual contract.
Ultimately, it saves hundreds of hours annually when hosting multiple events and provides peace of mind knowing experts are handling the negotiations.
Want help planning your next team offsite, team onsite, or client event? BoomPop’s experts can help you navigate every phase of planning. Explore our offsites.
Featured resources
8 Steps for Planning Your Company Retreat
A resource for new organizers on creating fun, productive, and successful corporate events.
