Have you dealt with the headache of attrition fees? Dreading having to be the one managing hotel room blocks? You're not alone in that struggle.
Unforeseen room block attrition can significantly impact your event budget. Attrition, also known as occupancy shortage on your room block, is often overlooked until it becomes a costly reality.
Many of our clients struggle with understanding hotel attrition fees. They often find room block management challenging to navigate.
As an event planner, understanding the intricacies of attrition is important. You may not have the event budget to support large attrition penalties.
Managing the room booking process and room block management can often be a daunting task.
In this article, we’ll explain what attrition entails and the factors influencing it. Additionally, we'll discuss strategies you can use to prevent excessive attrition fees.
Here's how to manage event attrition and group hotel room blocks.
Attrition is a clause in your hotel contract that outlines the expected room revenue that your group commits to utilizing and paying for.
Hotels use this clause as a safeguard in case your group block falls short of the anticipated number of attendees.
Once the hotel contract is signed, the hotel is committed to reserving a certain number of sleeping rooms for your event, prioritizing your booking over other potential business.
Therefore, this protection is in place for the hotel.
When planning your event, it's important to carefully consider the type of attrition you agree to in your contract. This decision can significantly impact your budget and financial obligations.
Attrition comes in various forms, each with its own set of implications and challenges. These factors can significantly impact your events and room block management strategies.
We always advise our clients to advocate for cumulative attrition at the lowest feasible percentage in their hotel contracts. These days, achieving 80% is typically the best you can do for your room block.
Take a look at your hotel contract and your contracted room block to see what type you have.
Let’s explore the different types of attrition and how they can impact your room block.
Nightly attrition means you are committed to utilizing a certain percentage of the hotel rooms in your room block each night.
For example, if you have a room block of 100 rooms on a Friday night. With an 80% nightly attrition rate, you will be responsible for paying for 80 rooms, whether they are filled or not.
Cumulative attrition is calculated based on the total number of room nights in your combined room block.
For instance, if you have reserved 1,000 room nights over a five-night period. With an 80% cumulative attrition rate, you would be responsible for paying for 800 rooms.
Sometimes, hotels may have an attrition schedule. This allows you to adjust the number of rooms reserved in your room block at various intervals leading up to the event.
For example, your contract might specify releasing 10% of hotel rooms 90 days before the event. Additionally, it could entail releasing 5% at 60 days, and another 5% at 30 days, totaling 80% flexibility.
This schedule is designed to help coordinate hotel room reservations. It aims to prevent financial penalties due to unmet booking requirements.
Let's explore how internal and external factors can impact attrition, and highlight ways to mitigate potential fees.
Is your event mandatory for attendees? If so, it's important to have a good understanding of who actually needs to attend your event.
Be mindful of any potential changes leading up to your event. These could include additional hires or shifts in attendance estimates that could impact your rooming needs.
The location of your event can also impact how attendees plan their arrival.
How many guests need to stay overnight before the event versus those arriving on the day of? How many reserved rooms are needed? Do you need to book meeting space as well?
If your event is not mandatory, consider analyzing past attendance. Additionally, review room booking data when creating next year's hotel room blocks.
This could give you good insight into who will actually attend your event based on previous history.
If your event is not mandatory and you’re not sure who will attend, you might also consider a reduced room block or limiting attendance.
Pro tip: Building anticipation for your event and encouraging guests to book accommodations early can help reduce dropouts. For event planners, this could also help boost future years’ attendance as well.
When planning an event, it’s especially important to understand your attendees and their habits.
Consider whether they are inclined to look for more affordable lodging options nearby. Assess the availability and cost of alternative hotels in your event's location.
Are you in a location where there are other hotels attendees can even look at? Are there nearby hotels?
Research hotels in the early planning stages of your event.
Also, consider if your attendees prefer certain hotel brands.
If all of your attendees leverage Marriott for travel, it makes sense to host your event at a Marriott. This encourages them to book at your preferred hotel.
Additionally, be mindful of any competing events going on around your event. Also, consider potential holidays, graduations, or peak seasons that could affect attendance.
As a meeting planner, you can also curate your program in a way that prevents attrition fees. Consider how to keep attendees engaged and excited until the end of your event, so they don’t end up leaving a day early.
Think about incorporating elements that will draw attendees towards the conclusion of the program.
This could involve scheduling a popular keynote speaker or offering fun activities that will encourage attendees to stay.
Here are some helpful tips to minimize your chance of incurring high attrition fees. Make sure to follow these steps during the contracting phase, the planning phase, and post-event to protect your event budget.
Navigating attrition fees during the contracting phase requires you to practice some strategies behind contract negotiation.
First, analyze your program history to identify patterns from prior years. Avoid overly aggressive increases in room block and meeting space commitments unless there is a very good reason to do so.
Second, pay close attention to the attrition percentage offered by the hotel block. Is it based on the cumulative room block or per night? Often cumulative offers greater flexibility for your room block.
Advocate for attrition based on your final room pick-up.
Some hotels will give you release deadlines when you can release 5% of the room block several times pre-event. However, once you have made those releases, the hotels expect you to pick up the full remaining room block. You want flexibility with your actual room pick-up simply for no-shows, early departures, etc.
Ensure there is a resale clause in your agreement. This means that if the hotel resells rooms, and you fall short of your room block, they will offset your attrition.
Ensure the hotel puts a clause in the contract enabling you to compare your registration list to their hotel guest list. Sometimes attendees book on their own at a different room rate. You should get credit for those rooms in your hotel room blocks.
Lastly, consider hotel and local demand during your event timeframe. If there is a city-wide event or high demand in the area during that time, you may want a little flexibility to block more rooms with some security.
With this type of demand, ensuring you have rooms available for your attendees becomes crucial, especially considering the potential for the hotel to sell out. Keep an eye on the room rate to ensure it aligns with your budget and requirements.
By incorporating these strategies during the contract stage, you can reduce your risk of unnecessary attrition in your room block.
Proactive communication and strategic planning will help you optimize your room block and avoid attrition.
Try to gain insight into the hotel's forecasted occupancy during your program dates to anticipate any potential challenges with your room block or opportunities.
Be proactive in discussing the possibility of giving your rooms back to the hotel for general sale. This is particularly important if they are forecasting high occupancy.
On the flip side, gauge if there is a possibility of getting additional rooms at your group rate if your pick-up is strong.
For event planners, communication here is key.
Additionally, schedule milestones in your planning timeline to monitor rooms booked outside your room block and track pick-up room rates compared to historical data.
Lastly, plan regular communications with attendees to remind them of deadlines. Encourage them to book within the negotiated room block.
Be on top of your room block management. Monitor the booking progress of the number of rooms in your room block by your event attendees.
For external events, consider offering discounts to incentivize attendees to book within your room block. This can discourage them from choosing alternative accommodations nearby.
To avoid unwanted attrition, here are the steps event planners need to follow after your event concludes:
When should you follow up with your hotel contact if attrition is present?
As an event planner, here’s what you need to discuss with the hotel if attrition is present post-event:
For more than 15 years, GoGather has delivered incredible corporate events while successfully avoiding and managing attrition fees. Need some help or a guide to manage event attrition and group room blocks? Let's chat about how GoGather can help you with every aspect, from choosing your venue to managing your budget.