Contracting has always been a key part of mitigating risk during the event planning process but now more than ever requires extra vigilance. Here we highlight some key trends and considerations to help steer you through this landscape.
Meetings and Events Contracting Trends
Regional vs. Global
Although many countries have lifted restrictions on live events, there is still a great degree of uncertainty, particularly within the ever-changing landscape of inter country travel. Even if restrictions are lifted in the country of destination, there is no guarantee that your delegates will be able to travel there at the time of the event. As we are seeing in the UK at the moment, the red, amber and green list is changing on a weekly basis.
As a result we are seeing a trend of hotels/venues showing preference towards in-market or regional events over events with global audiences. When faced with a choice between pieces of business, some venues have opted for local events where the risk of cancellation or postponement is reduced and therefore the certainty of the revenue is more assured.
With increased scrutiny on meetings and events budgets it's crucial to have visibility over all M&E activity. Therefore additional layers of governance, in the form of policies and processes, are coming into place for a lot of customers seeking to gain greater control over spend.
It's especially important in the current climate where restrictions are lifting, yet corporations want to ensure it's safe for their employees to meet and that budgets aren’t being put at risk of becoming liable for cancellation fees. In some cases, interim approval policies are being put in place to gain additional business approval prior to sourcing.
Adding extra layers of protection outside contracting should also be part of your strategy, including an approvals system in your meetings policy and advising bookers to diarise key cancellation and attrition dates are best practice examples to take forward into 2021 and beyond. At BCD M&E, we developed our venue sourcing technology to track these key dates and streamline the approvals process.
Supplier contracts haven’t evolved consistently and we are finding some disparity with flexibility in clauses for cancellation and postponement. Force majeure is no longer a clause being accepted for COVID related cancellation or postponement and most hotels/venues are looking for a specific COVID clause in the contract to offer robust protection for restrictions changing at your chosen destination.
Equally, the amount of legal support available for checking event contracts varies. Some customers have created roles within M&E teams to support this task. When negotiating contracts, we recommend the use of a contract addendum that outlines all relevant clauses and terms and conditions for the hotels/venues to accept or negotiate upon, such as the specific COVID clause mentioned above. Using this addendum can support with the negotiation when contracting and enables consistency even through these challenging times. A lot of venues, especially smaller or independent properties, don’t have in-house legal support either so are unable to offer the same level of flexibility with their contracts as others can, so in many cases we have shared our clients contract addendums at the time of shortlisting to highlight these discrepancies.
Our recommendation is always to double check contracts and make sure you fully understand your liability before signing as this is essential to reduce your financial risk further down the line.
Credits and Rates
In 2020 and 2021, event postponements have been frequent and many suppliers offered credit for future bookings instead of issuing refunds. Similar to contracts, these have been hotel/venue specific and we have seen a wide variance on expiry dates on use of credits. Hotels and Venues that are offering shorter expiry dates are limiting clients’ opportunity to utilise them, especially if there is a regression of the roadmap. But suppliers offering longer expiry dates are finding it challenging to fit these events into the future booking calendar as it is causing congestion with other events in busier periods. When negotiating cancellation credits we recommend asking for them to be redeemable on any events from your company and not just a rebook of the specific event in question allowing the hotel to retain the revenue and the client to recoup their credit within the expiry date.
Contact us to learn more about how our team of venue
experts can mitigate the contractual risk across your meetings programme.