When Lower Room Rates Affect Your Attendees

PCMA’s Catalyst community offers ideas on how planners can work with a conference hotel that is undercutting room-block rates.

Author: Convene Editors       

PCMA’s Catalyst community offers members a platform to ask each other questions, share ideas, or, as the website says, “communicate and collaborate.” Here’s a sampling from a recent Catalyst discussion.

“I am looking for some guidance on how to work with a conference hotel that is selling rooms over your event dates at a lower rate than your hotel block,” Carrie Renuart, director, conferences and events for ARMA International, wrote to the Catalyst community. “We unfortunately do not have a lowest-rate clause in our contract. Do we have any recourse at all?”

As most industry lawyers would say, it depends on what your group has blocked, how your pickup is, and if your participants are getting the lower rate. Even if there is no lowest-rate clause, perhaps you have an audit clause or can discuss with the hotel the need for an audit to ensure your group is credited for all rooms occupied by group members regardless of rate paid or reservation method.

Have an open conversation with the hotel’s director of sales and marketing, or if you work with the general staff officer, [ask] the person who has your account. The concerns, of course, are about attrition, comps, and history.
—Joan Eisenstodt, Principal, Eisenstodt Associates LLC

It is in the hotel’s best interest that you fill your block, so they should either strike that lower rate from their system or lower your conference rate to match it. Is this on their website or a third-party website? Is this a branded hotel? If it is, reach out to your national sales office for further support, if needed.
—Kerry Kerr, Senior Director of Global Accounts, HelmsBriscoe

I would double check one thing: Does the hotel have a destination/resort fee that your group is exempt from, but other guests who book outside the block must pay? For example, if you see a rate of $250 but your group rate is $270, do the guests paying $250 need to pay a $45 destination/resort fee on top of their rate?

[In that case], you still have the lowest rate. However, should there not be a destination/resort fee at all at this location, I would have an open conversation with your point of contact at the hotel.
—Justin Rosales, Senior Sales Manager, Yours Truly, DC

You may not have much recourse if there wasn’t something included in your contract to cover that. But here is a clause that we request in our hotel contracts [that has often been] accepted. We sometimes have to agree to a slight variation to it, but it’s important to have that conversation. Here is the language: “The hotel commits to refrain from providing rates lower than those agreed upon in the contract, as well as special promotional rates, weekend packages, or additional benefits during the official meeting dates, unless these rates and benefits are equally applicable to all rooms within the group’s reserved block.”
—Penelope Pina, Director of Meetings & Conferences, American Mathematical Society

It is hard to know [without] the full details, but if the hotel is offering only a few rooms through third-party search engines at a lower rate, it is often difficult to close these out and those rooms have special limitations — pay in full, non-refundable, etc. But I have asked a hotel to close out the lower rates before and they were able to do that. During a previous recession, we asked the hotel to lower the group room rate to be in line with rates in the surrounding hotels so that we and the hotel did not lose group rooms, and they were willing to do this.

It is a different time now, but if for any reason your group rate exceeds general rates in surrounding hotels, this may be an angle to discuss with the hotel. Otherwise, I would definitely request a room audit after your group checks in so that the hotel can search for any guest rooms that were booked outside of the room block. Then, you have accurate history and pickup toward any attrition clause.
—Julia Levene, CEO, Hotel Site Selection Specialist, Association Planner Partners

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