Road Warriors Beware
Like so many of you “road warriors” out there, I have learned to expect the unexpected when it comes to airline travel these days. In the last few months, travelers struggled to cope with a multitude of flight cancellations in the wake of the volcano eruptions in Iceland and severe weather across this country.
In addition to inconveniencing so many passengers, the recent airline flight cancellations had a significant impact on the meetings industry. We had a number of clients contact us to say that their meeting had been affected as a result. Some were unable to hold their meetings, as they could not get their attendees to the destination. Others arrived at their destination but found that no rooms were available because the previous group’s attendees had not been able to depart and stayed over as a result. In other instances, function space was not available because the previous group had extended or adjusted its meeting times. This brings up the burning question: What are the duties and rights of a group when a flight cancellation impacts a meeting? The short answer is: It depends on what the contract says, if anything, about transportation interruptions.
Provisioning Up
The group’s duties will be evaluated against the contract’s force majeure provision. A force majeure provision should be included in each and every contract signed in connection with a meeting. There are three components I focus on when reviewing the provision. First, I review the grocery list of items that could occur such as acts of God, weather, strikes, wars, threats or acts of terrorism, travel advisories or diseases. It is important to ensure that transportation interruptions or flight delays or cancellations are included on the list. It is also important to include a catch-all provision at the end of the list such as the following: “or any other cause beyond the parties’ control.”
The second and most critical component is the standard of impact. If any of the items on the list occur, what has to happen to performance in order to trigger the protections of this provision? Does performance have to be rendered impossible? Or illegal? Inadvisable? Commercially unreasonable? Depending on what requirement is included in the contract, the group may have a difficult time exercising its right to cancel the agreement without liability. Standards such as “inadvisable,” “commercially unreasonable” or “materially affected” make it easier to invoke protections for the group, especially with respect to flight cancellations. Another option is to specify a certain percentage of attendees who would be discouraged from attending the meeting. Based on surveys of passengers affected by flight cancellations, this option offers another way of establishing that the group has met the requirements of the provision.
The third and final component is defining what will happen if the group could cancel its contract without liability due to force majeure but chooses to perform the contract anyway. The provision should state that in such an event, the hotel will waive room and food and beverage attrition fees related to a smaller meeting and honor any lower room rates. For example, if the flight cancellations meant that only 50 percent of the group’s attendees could travel to the meeting, the force majeure provision may give the group the right to cancel the agreement without liability but the group can elect to hold the meeting and not be subject to attrition fees for a lower utilization of its room block.
Groups also may want to consider purchasing event cancellation insurance for their meetings. Typically, the following are considered “covered events” under the policy: adverse weather conditions, non-appearance of a principal speaker or entertainer, terrorism (but only to the extent the event meets the policy’s parameters in terms of proximity and timing), labor disputes, airline cancellations due to adverse weather conditions or labor disputes, and floods.
Typical exclusions include financial cause or lack of support for the event, war or military action, government action and terrorism outside of the bounds of the policy. By having such insurance in place for revenue-producing meetings, the group can ensure that no matter what the liability under the contract, the group’s revenue from the meeting will be protected.
Rights
The group’s rights under the hotel contract in the midst of transportation interruptions also will be governed by the contract. In this instance, however, what the contract says is often not as important as dealing with the practical issues. For example, if the prior group has not departed due to flight cancellations, the hotel may not have enough rooms to honor your group’s reservations. In the event that a guest overstays their reservation dates, the hotel generally has two choices: Evict the guest or assume a new contract exists and charge the guest on a day-to-day basis. Since eviction is a rare consequence in the event of overstay (eviction is a consequence in the event of a guest’s violation of law or hotel policy), hotels typically treat the overstay as a new contract. That said, the hotel has no other option but to relocate the incoming group’s guests. Since a hotel room reservation is a contract, the hotel must provide alternate accommodations to the guest. That may mean “walking” the guest to any other hotel or, if the contract includes a “walk” clause, the terms of that clause will govern in such an event. It is important to include parameters in the clause such as the type of alternate hotel (nearby and equal or better quality), and reimbursement of transportation to and from the hotel and the alternate hotel as needed. Some groups request that the guest be returned to the hotel as soon as possible and receive upgraded accommodations along with an apology letter. Bottom line, if it appears likely that a walk situation will occur, the group must monitor the hotel’s relocation practices to ensure they meet the terms of the contract.
As life imitates art, I recently found myself in a walk situation caused by bad weather in another part of the country. While it appeared that the hotel had appropriately followed walk procedures, its method of dealing with guests who were being relocated was less than professional. Front desk managers were not adequately trained in basic customer service in such a situation and, as a result, many attendees were upset about the situation. In order to avoid this outcome, planners should work with the hotel’s front desk staff to ensure attendees are treated appropriately.
With regard to function space, the group’s rights are governed by the contract but once again, if the previous group does not vacate the space, the incoming group has the practical problem of securing its required space. As compared to sleeping rooms though, the group should have more leverage to insist that the hotel move the previous group. Function space is rented on a daily basis for specified hours. If a group exceeds the hours it reserved, the hotel has the right to remove the group from the space. Again, it is important for the incoming group’s planner to work closely with the hotel to ensure that this situation does not arise in the first place. Planners can undertake a number of measures both in and out of the contract to ensure that if transportation interruptions occur, they will be properly poised to minimize their duties and maximize their rights.
Barbara Dunn is an attorney and partner with Howe & Hutton, Ltd. in the firm’s St. Louis, Mo., office. She specializes in hospitality law and is a session speaker at the 2010 Rejuvenate Marketplace in Louisville, Ky., Oct. 18-21. For more information about Rejuvenate Marketplace, visit RejuvenateMeetings.com.
