HOTEL CONTRACTS: 18 JARGON BUSTERS & TIPS - Global Incentives

We all cringe when we are faced with a new Contract that we need to understand and sign on behalf of our company.

A Hotel Contract is an important and legal document but can be baffling if you are not used to the jargon.

The following 18 Jargon Busters & Tips for Hotel Contracts relate to that which you will receive when you are booking an event.  Some of the jargon is fairly self explanatory but for those new to event management and working with hotels, they have been included.

HOTEL CONTRACTS:  18 JARGON BUSTERS & TIPS

1.  B&B.  Let’s start with the easy one.  A Bed & Breakfast rate is a rate where you get a bedroom for the night and also breakfast the next morning.

2.  ROOM ONLY.  When you pay only for the accommodation.  Useful if you need to leave very early the next morning and don’t have time for breakfast.  Note however, if you then do have breakfast you will normally pay more than you would have done for a B&B rate.

3.  SINGLE OCCUPANCY.  Some hotels do still have single rooms, i.e. single beds, particularly in the lower category hotel.  However, if you want a larger room, see point 4 below.

4.  DOUBLE ROOM FOR SINGLE OCCUPANCY.   A double room for single occupancy will give you a large bed – normally double, and a larger room.  You could pay a higher per person rate.  For example a Double Room (for 2 people) charged at £100 per night means that the per person rate is £50 per night.  If a single person occupies the double room, the rate may be quoted at, say, £75 per room per night.  The room rate will be lower but the  per person rate will be higher.

5.  RUN OF HOUSE.  This relates to the allocation of rooms that the hotel will apply to your booking and means that the hotel reserve the right to allocate the rooms according to their other bookings and you do not make the choice.  They will normally be the same category rooms but for example, if it’s a large hotel, the rooms may be scattered across the hotel.  With negotiation you can make special requests but this will normally be ‘according to availability’.  If you do not want Run of House allocation and want to choose the rooms, you may be asked to pay a premium for this.

6.  ENTRY LEVEL.  This usually means the lowest room category.  Hotels categorise their rooms differently but an Entry Level room will be the cheapest.  The categories will then rise in value and have different features.  Other descriptions can be Standard (sometimes the same as Entry Level), Deluxe, Executive and go all the way up to the Suites and Presidential Suites.  Make sure you know what you are getting for your money and what is included in the room rate.  You can also be charged extra for the view – rooms with a sea view will typically be more expensive than one which offers a garden view.

7.  UPGRADE.  In some circumstances hotels offer room Upgrades, which means that you will get a better category of room for the price of the lower category that you booked.  If you are booking a large number, say 50 rooms, you may be offered 1 or 2 free Upgrades.

8.  DAY DELEGATE RATE (DDR).  This is for those who want to hire a meeting room and have morning coffee, lunch and afternoon tea included in the rate.  This will be a ‘per delegate’ rate.  It normally applies to the hours between 9.00 am and 5.00 pm – sometimes you can negotiate a little extension to these times if required but this will depend very much on the venue’s other bookings.

9.  24 HOUR RATE.  This is for those who want 8 above, but in addition they want evening dinner, overnight accommodation and breakfast the next morning.  This will be a ‘per delegate’ rate and will apply from your arrival time – for a 24 hour period.  Example:  if you arrive at the venue in time to start your meeting at, say, 9.00 am your rate will apply up 9.00 am the following morning (i.e.  24 hours later).  It is not unusual to combine both a DDR and a 24 Hour Rate – this will give you a 2 day meeting with 1 overnight stay and all the inclusions in items 9 and 8 above.

10.  MEETING ROOM LAYOUT: Seating formats for meetings rooms can vary enormously with ‘Herringbone’, ‘Top Table & Sprigs’ being some of the more unusual descriptions.  The following shows some of the more frequently used shapes.  

11.  AV PACKAGE.  ‘Audio Visual’ is what you will need for presentations to your audience.  Typically, a hotel would offer an AV Package that would include a Screen, Projector and/or link to your own laptop, WIFI and a Flipchart.  Depending on the size of the meeting room, it may also include microphones and speakers and all the gizmos to make it work.  Tip:  These last items may be additional, but ensure you are clear what your AV package includes.

12.  BEVERAGE PACKAGE.  This is a charge for a specific amount of drinks that will be served per person.  For example, if you pay for a Beverage Package to be served with dinner, this might include ‘Half bottle wine, soft drink, water’ per person.  Any other drinks will be an additional cost.

13.  F&B (FOOD AND BEVERAGE) MINIMUM SPEND.  If you have contracted a venue for a projected number of people, say 100, the venue will have calculated the amount they need to have earned from this booking and given you a Minimum Spend price.

Example:  100 delegates Dinner & Beverage Package rate of say, £65 pp = £6,500

Minimum Spend imposed by venue, say = £5,750

Attendance drops to 80 delegates, you would still have to pay £5,750 (not 80 x £65 which equals £5,200)

Unfortunately, it doesn’t automatically work the other way round!  Tip:  If your numbers increase by a significant amount you put your negotiating skills to the test and get the ‘per head’ rate reduced.

14.   TAX AND SERVICE, THE ++.  It is important that you check if your rates INCLUDE or EXCLUDE Tax, Service, Gratuities etc.  When you are given a ‘++’  rate, this means that these are additional, but not necessarily on everything.  Some items may include Tax, some may not and the tax rate varies from country to country.  Tip:  Ensure you check the rates as this could make a hefty addition to your costs.

15.  ROOM NIGHTS.  This is a calculation the hotel makes for their own revenue purposes.  For example, if you have 60 delegates staying at a hotel for 4 nights, each occupying one room, the number of ROOM NIGHTS would be 60 x 4 = 240 ROOM NIGHTS.

16.  ATTRITION.  In your Contract, hotels will allow for Attrition, normally 10-15% of the total ROOM NIGHTS.  So, if you have contracted for 240 Room Nights, your number of room nights can drop to 216 (reduction of 10% x 240 = 24 rooms) before you are penalised.  Similar to their MINIMUM SPEND but for accommodation.  Tip:  You will have been given a deadline to confirm final numbers so it is wise to keep your eye on this deadline and adjust accordingly if you can.

17.  CANCELLATION CLAUSE. This is a timeframe laid down by the venue in the case of Cancellation of an Event.  Once you have signed your Contract you automatically enter the Cancellation Period.  This clause will normally provide stages at which (should you cancel) the level of penalty will change.  The further away your event is, the less onerous the cost of cancellation will be.

18.  GET IT IN WRITING!  An important tip.  Never, ever rely on word of mouth only.  If you have a verbal agreement, ask them to put it in writing.  Things can change very quickly, people leave organisations, or they might forget your verbal agreement.  You will then have a document that can be referred to in case of misunderstanding.

Ensure you work with your Legal Team to ensure you are happy with your Contract before signing!