Best Practices for Negotiating International Hotel Contracts

Best Practices for Negotiating International Hotel Contracts

Negotiating international hotel and venue contracts can be a little different from those negotiated within the United States. Generally, in the U.S., hotels have standard contracts they like to use and will work with planners to create a final version both parties can agree upon. However, working with most international hotels requires an event planner to take charge of the initial drafted contacted. Planners will find that many international hotel “contracts” often resemble simple event orders rather than outlining contractual terms, leaving the buyer to assume much of the risk. To remedy that problem, here are a few ways to ensure your international hotel contract is squared away.

Draft Your Own Contract

Feel free to use a past hotel contract as a template for your international hotel contract. Customize it by including any information the hotel has already supplied regarding room rates, and F&B. Be sure that important clauses are clearly defined, including, but not limited to:

  • Obligations to Perform – Indemnity Clauses are not usually a part of international hotel contracts. Be sure to include a breach by hotel clause as well as a process for dispute resolution.
  • Force Majeure (Acts of God) – It is important for each party to understand their responsibility in if the event can’t take place due to something out of everyone’s control. Make sure the clause includes disasters, government regulations, civil disorders, terrorism, epidemics, disease, strikes, suddenly-occurring travel restrictions and incapacitated travel facilities. Force majeure usually isn’t part of many standard international hotel contracts, so make sure it is included.
  • Room Block Attrition – Include a clause that requires the hotel to conduct an audit to compare room pickup to your registration list. If your event doesn’t meet expectations, make sure to include a room block clause that requires the hotel to make a concerted effort to resell the rooms. Another option would be to apply a percentage of the attrition to another event. In either case, sure you are comfortable with the percentage you will be responsible for.
    On the other hand, if your event exceeds expectations, be sure to build in some concessions!
  • Disturbances – Although hotel renovations may not directly affect your event space, construction noise in a room adjacent to yours may certainly disturb your guests. Consider adding a clause that protects you from these types of distractions.

Be Clear

Making sure that both parties clearly understand their obligations is key to a successful partnership and to a successful event.

  • Have the contract drafted in both languages if necessary.
  • Be clear regarding currency exchange and include the exact exchange rate in your contract. It will be easier to track budget items if you include both currency rates any time dollar amounts are mentioned.
  • Make sure that meeting room names are included in the contract and require that the hotel notify you in writing for approval prior to moving you to a different room.
  • Add set-up times to each meeting room on the schedule to avoid any on-site scheduling and set-up complications.
  • For room blocks, try to use “total room nights” rather than “rooms per night”. It is sometimes difficult to anticipate when guests will check in and out.
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