WHAT’S NEW INHOTEL CONTRACTS

WHAT’S NEW INHOTEL CONTRACTS

Steven M. Rudner

RUDNER LAW OFFICES

214-373-1900

Steven M. Rudner

RUDNER LAW OFFICES

214-373-1900

CHANGE IN MANAGEMENT

OR OWNERSHIP OF HOTEL

CONCERNS ABOUT RENOVATION

In the event the Hotel has scheduled or schedules construction which is to be underway during the meeting dates, the Hotel will, as soon as such construction is scheduled, arrange for the group to participate in a conference between the Hotel, the Group and the contractor, to be held three months before the meeting dates. If the contractor states that in its reasonable judgment, such construction is likely to unreasonably affect the use of the facilities reserved for the Group under this contract and such other facilities as may be substituted hereunder, the Group shall have the right to cancel this agreement, and neither party shall be liable to the other for damages associated with such construction.

NON-COMPETE CLAUSES

Enforceability of Liquidated Damage Clauses

Is the hotel entitled to recover its revenue or its profit?

ANTICIPATED ROOM NIGHT AND BANQUET FOOD AND BEVERAGE REVENUE FIGURES

At this time, the resort is holding # room nights for your use over the contracted dates, which will generate total revenues of ($___). Planned banquet food and beverage revenue is ($___). These figures shall be referred to herein as the “Anticipated Room Night and Banquet Food and Beverage Revenue Figures.” All food and beverage is subject to a __% service charge. All revenue figures are net and not inclusive of taxes, service charge or commissions. Food and food service charges are subject to state sales tax, which is currently __%.

ATTRITION

We agree to allow for a X percent reduction in each of the “Anticipated Room Night and Banquet Food and Beverage Revenue Figures”, provided that you make a written request for that reduction between now and 60 days prior to your arrival date. At the conclusion of your meeting, we will subtract the rooms revenue derived from your meeting (excluding revenue derived from pre and post program stays) and the amount of any permissible attrition you have taken from the Anticipated Room Night Revenue Figure set forth above. Any remaining amount will be posted as a charge to your master account, plus applicable taxes.

Additionally, at the conclusion of your meeting, we will subtract the banquet food and beverage revenue derived from your meeting and the amount of any permissible attrition you have taken from the Anticipated Banquet Food and Beverage Revenue Figure set forth above. Any remaining amount will be posted as a charge to your master account, plus applicable taxes and service charges.

CANCELLATION

In the event of a group cancellation, liquidated damages in the following amount will be due, plus applicable taxes and service charges.

Number of days Prior to Arrival on which Resort is Notified of Cancellation

0-90 days

91-180 days

181-365 days

Anytime between signing of contract and 366 days

Percent of “Anticipated Room Night and Banquet Food and Beverage Revenue Figures”

X Percent

X Percent

X Percent

X Percent

RECIPROCAL CANCELLATION CLAUSES: UNENFORCEABLE

AVOIDING ATTRITION

At the reservations due date, as established above, we will calculate the amount of room attrition which we anticipate will be due. We will advise you of that amount shortly thereafter, and that amount will be due immediately upon receipt of our invoice. Upon receipt of your payment, that amount will be credited to your master account and will be applied to the final calculation of rooms and food and beverage attrition upon the conclusion of your meeting.

What about credit for rooms resold? Is this a good idea?

Eliminates the certainty that is the goal of a liquidated damage provision

Which rooms were resold? Hotel is entitled to sell all of its rooms first before selling a group’s rooms twice

At what rate were the rooms resold?

When will group pay damages?

Will Group believe the hotel about room resale?

What about the cost of the resale effort?

WHAT’S NEW INHOTEL CONTRACTS

WHAT’S NEW INHOTEL CONTRACTS

Steven M. Rudner

RUDNER LAW OFFICES

214-373-1900