When negotiating a hotel contract for a meeting, it is super important to pay close attention to the cut-off date. The cut-off date is typically 30 days prior to arrival. What does a cut-off date mean?
The cut-off date is the very last date possible to reduce rooms you don’t need, and not pay for those rooms. Keep in mind, you may reduce rooms by 10% per night. This is the typical agreement hotels are offering when negotiating attrition.
For example, if you have 50 rooms the first night, and 75 rooms the next night, you may reduce 5 rooms on the first night (10%) and 7 rooms on the next night (10%), as long as you make the reduction prior to or on the cut-off date. If you choose to reduce rooms by 10% per night, you do not pay for those rooms. However, if you reduce more than 10% on any given night, you will pay for rooms you do not need!
Always negotiate and get a Re-Sell Clause in the contract which says; if Group reduces more rooms than 10% on any given night, the Hotel will re-sell rooms not needed and Group will not be responsible for payment of rooms re-sold. This means you would not pay for rooms the hotel can re-sell above if you have reduced more than 10% of the rooms before or on the cut-off date.
Also, very important to note; after the cut-off date hotels do not have to and probably won’t offer your negotiated group room rate! If you need more rooms after the cut-off date, chances are you will pay more for those rooms. Keep in mind, additional rooms may not even be available. After the cut-off date hotels are not obligated to offer the group rate or more rooms than contracted.
Work very closely with your conference services manager leading up to the cut-off date and the group’s arrival day if you think you may need more or less rooms per night. Communication is key to getting what you want. Try to avoid paying attrition for rooms you don’t need or secure more rooms at the group rate. A closely working relationship with the conference services manager helps a lot, but it’s the hotel’s projected occupancy and room rates they are selling over your dates that determines how the hotel responds to your requests.