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How to effectively manage your hotel attrition?
Magdalena Bonnelly • Oct 31, 2023
Hotel room block attrition refers to the situation where a significant number of reserved hotel rooms remains unbooked or unused within a specific timeframe.
This can happen due to various reasons, such as changes in the number of attendees, cancellations, or last-minute changes in the event schedule. Attrition can have a negative impact on both hotels and event planners, leading to financial losses and logistical challenges. Another cause of attrition is the availability of alternative accommodation options. Attendees may choose to stay at nearby hotels or Airbnb rentals instead of booking rooms within the reserved block at the hotel. This can lead to a decrease in the utilization of the reserved rooms, causing attrition.
Impact of hotel room block attrition on hotels and event planners
Hotel room block attrition can have significant financial implications for both hotels and event planners. Hotels rely on the expected revenue from the reserved room block to meet their financial targets. At the time of the contract, hotel takes guestrooms out of their inventory and holds them for the group. Attrition usually has allowable slippage but when a large number of rooms go unoccupied, hotels may not be able to recover the lost revenue, putting a strain on their profitability.
Hotel contracts usually have two items that meeting planner needs to pay attention to, when it comes to attrition: % of allowed attrition and cut off date for attrition.
For event planners, attrition can result in financial penalties imposed by the hotel when conference room block has unoccupied rooms that exceed allowable slippage AND cut off date has passed.
That is when attrition charges are assessed and meeting planner is presented with estimate of those charges.
Attrition clause in hotel contract
When sending RFP to the hotel, include information on attrition percentage you want for your room block. Industry standard is anywhere from 80-90%. Being upfront with the hotel on your expectations saves you and hotel time going back and forth. To further protect yourself, specify in attrition clause what happens when hotel reaches 100% occupancy over your meeting dates (excluding out of order rooms). Usually, hotels agree to include sentence in attrition clause, that if hotel reaches 100% occupancy on any of the nights client is in attrition, the attrition charge is not going to apply. When including this sentence, make sure that hotel agrees to provide you daily reports on hotel occupancy when you are on-site.
Another avenue to mitigate attrition charges is to set up two cut off dates, that are a month, or so, apart (depending how far in advance meeting planner is booking the venue). If your registration numbers are low and pace is much slower compared to previous years, having two cut off dates will allow to start mitigating attrition risk earlier in the process as well as give hotel additional time to sell, potentially unused, rooms.
Strategies to minimize hotel room block attrition
While hotel room block attrition can be challenging to completely eliminate, there are several strategies that event planners can employ to minimize its impact. Effective communication and negotiation with hotels, careful consideration of contract terms, and proactive monitoring and management of room block utilization are key. First off, having accurate numbers for room block is necessity to avoid attrition when its conference time. In order to gain the knowledge of what are the best numbers to contract, meeting planners need to have a look into last 3 years of data from the meetings. If you don't know where to start - contact us
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Communication and negotiation with hotels
Open and transparent communication with hotels is crucial in managing room block attrition. Event planners should clearly communicate their expectations and anticipated room block utilization to the hotel. By providing accurate attendee numbers on RFP, possible with our 7 Step Process to Event Design, and keeping the hotel informed of any changes, both parties can work together to minimize attrition.
Negotiating flexible contract terms i.e. lower penalties % or more favorable terms based on the specific needs of the event are definitely helpful in times when attrition comes into play. Hotels are often willing to accommodate reasonable requests, especially if there is a strong partnership between the hotel and the event planner.Examples of what to ask for when negotiating with hotel: higher % of slippage - current industry standard is 10-20%, cumulative attrition (not per day), cut off date as close to arrival date as possible, for conferences booking far out dates: two reviews of room block where it is allowed to release certain % of rooms - 18 months prior and another one at cut off date (21 or 14 days prior to arrival), increased % of allowable slippage, no attrition charges on nights hotel reaches 95-100% occupancy etcMonitoring and managing room block utilization
Proactive monitoring and management of room block utilization are crucial in minimizing attrition. Event planners should regularly review the room block utilization and communicate with attendees to ensure they are booking within the reserved block. This can be done through targeted email reminders or personalized booking links.Room block names vs. registrant list audit is one of best practices meeting planners can implement. This process allows audit of every registrant vs. names in the room block. Any discrepancies can be resolved at that time.
In cases where attrition is anticipated, event planners can consider releasing unbooked rooms back to the hotel before the attrition deadline. This allows the hotel to sell the rooms to other guests and minimizes the financial impact on the event planner.
Creative solutions for minimizing attrition
Event planners can also employ creative solutions to minimize attrition. Offering incentives for attendees to book within the reserved block, such as discounted rates or exclusive perks, can encourage higher utilization. Additionally, partnering with the hotel to promote the event and its benefits to potential attendees can help generate more bookings within the block.When hotel is insisting on per day attrition and is not willing to accommodate cumulative method, what you could negotiate is a varying attrition % by day. Another solution is to re-block at lower numbers with a negotiated ability to increase your block on a rolling schedule (based on availability) at group rate (hotel’s discretion) or at a specified +X% above group rate. Our recommendation is to always ask for cumulative attrition but in some instances, meeting planners may need other solutions.
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Corporate Meeting Planning Tips
Do you ever feel like you are not getting the best deal from suppliers? Do you have the feeling that not all fees are being disclosed to you upfront? And then, on top of it, you need to provide updated numbers for budget meetings and show a forecast of the spending to the annual budget for conferences. We can feel the stress building up just by asking the questions! But it's you, who is affected the most by those circumstances. To help you, we created a special service called Event Forensics. When you look at the term “forensics”, it has few meanings, but when we created the service, we focused on this one especially: "scientific analysis of physical evidence (as from a crime scene)" (source: https://www.merriam-webster.com/dictionary/forensic). How this service helps meeting planners is it analyzes "physical evidence" from past conferences, for discussion or debate. And in our world, negotiations with suppliers. After all, negotiations are a discussion or a debate, right? Our sourcing and contract negotiation services, always start with event forensics. Schedule your free consultation here . Let us tell you how this service works . When we start working with you, we will ask you to upload all necessary contracts and invoices from the last three conferences you held. For every $ that you have spent during the conference, we will assign it a category and input it into our proprietary tool. We will compare your contracted room block to the actual number of rooms occupied. If you ended up with an overflow hotel or two, we will input that data as well. We will compare your contracted food and beverage minimum to your actual spending. We will track every meal and f&b function you have had in the hotel and off-site. If you had separate meals for staff, we would track them in a separate column. Production, AV, labor, set up fees, corkage fees, bartender fees, transportation, entertainment, shipping, security, etc. we will input all of those and compare those for you year after year, so you have data from at least the last three years in front of you. If this sounds like a service you need, click here to schedule a free consultation. At the end of our Event Forensics service, you will be provided with a customized "dashboard" where you will be able to gain high-level insights of trends, with recommended customized strategies for future programs. You will know EXACTLY what your conference's economic impact on the destination is. As a final attribute, this service will help with creating the most accurate RFP needs and be ready at any point of the year for budget meetings and updates. One of our clients, with the help of Event Forensics, got rid of overflow hotels for their conference, started sourcing larger hotels for all attendees to stay in the conference hosting hotel, revised the contracted f&b minimum to leverage more concessions, and was ready for budget meetings with CEO, COO and Finance Committee. We would love to help you create unmissable events. Schedule a call TODAY!
Managing room blocks can be one of your most challenging tasks. Room blocks, the reserved sets of hotel rooms for event attendees, are crucial for ensuring that your participants have a comfortable and convenient place to stay. To help you navigate this complex aspect of event planning, here are some essential tips on room block management. 1. Understand Your Audience Before you even begin to negotiate room blocks, it's vital to have a clear understanding of your event's demographic. Consider factors such as the average budget of your attendees, their preferences for accommodation, and any specific needs (e.g., accessibility, family-friendly options). This insight will guide you in choosing the right hotel(s) and in negotiating terms that best suit your attendees. 2. Start Early Hotel accommodations can fill up quickly, especially in busy seasons or around large events. Starting your room block negotiations well in advance not only ensures availability but also gives you leverage in negotiations. Early planning can lead to better rates and more favorable terms. 3. Negotiate Wisely Negotiation is key in room block management. Don't accept the first offer; instead, use your event's potential to leverage better rates or perks. Consider negotiating for complimentary rooms based on 1 per X rooms reserved should be complimentary, reduced rates for early bookings, or amenities like free WiFi or breakfast. Remember, everything is negotiable. If you need help negotiating your future contracts, drop us a line ! 4. Communicate Clearly Effective communication with both the hotel and your attendees is crucial. Ensure that the terms of the room block, including booking deadlines, cancellation policies, and room rates, are clearly communicated to your attendees. Use multiple channels to disseminate this information, such as emails, event websites, and social media platforms. 5. Monitor and Adjust Keep a close eye on your room block uptake. If you notice that rooms are being booked faster than anticipated, consider negotiating additional rooms to accommodate more attendees. Conversely, if bookings are slow, you may need to adjust your marketing strategies or renegotiate the terms to avoid penalties for unbooked rooms . 6. Leverage Technology Several software solutions can streamline room block management by providing real-time data on bookings, attendee preferences, and more. Utilizing such tools can save you time, reduce errors, and provide a better experience for your attendees. Ask hotel what kind of software they use and ask to be set up in the system. 7. Plan for Attrition Understand the attrition clause in your contract, which refers to the penalty for not filling a certain percentage of reserved rooms. Negotiate this clause to be as flexible as possible, and have a contingency plan in place for filling rooms, such as marketing to a wider audience if initial bookings are low. 8. Build Strong Relationships Cultivating strong relationships with hotel representatives can be incredibly beneficial. A good relationship can lead to better deals, more flexibility, and valuable support in managing your room blocks effectively. 9. Gather Feedback After the event, gather feedback from your attendees regarding their accommodation experience. This information is invaluable for improving future room block management and ensuring that your attendees' needs are met. 10. Learn and Adapt Each event is a learning opportunity. Reflect on what worked well and what could be improved in your room block management. Continuous learning and adaptation are key to becoming proficient in this complex aspect of event planning. By applying these tips, you can ensure a smoother process, happier attendees, and ultimately, more successful events. Remember, experience is the best teacher, and every challenge is an opportunity to learn and grow in your role.
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