Event Contracting Challenges & Meeting Professional Tips

ITA Group
ITA Group
event planners negotiating contract


That devil of a year known commonly as 2020 is finally in the rear view. That means it’s time to adjust and get ready for 2022 and beyond.

“What about 2021?” you might be asking. Well, you likely already have things in place for the current year, but these are quickly becoming short-term goals, and you need to start thinking about long-term future planning again.

Many clients seem to assume that, with the pandemic, everyone needs business (no matter the year) and is willing to practically give space away while accepting all terms and conditions. But based on recent experience, this is not always the case.

There are five factors contributing to event planning challenges:

1. Limited Space

There’s been a variety of recent stories in the media on the increase in savings for middle/upper middle class Americans. This means consumers are going to be spending their savings on vacations and other experiences when it becomes safe to travel again. This is good news for our hotel partners but also means more demand and more competition for our clients to place their programs. People are probably going to stick to the domestic U.S. because of the complexities of traveling outside the country—limiting the space that is available for groups even more.

2. High Compression

Many hotels have been faced with moving groups from 2020 and 2021 to as far out as 2024 for rebooking creating compression on those years and leaving many groups vying for little space. In addition, venues will be working to reschedule city-wide conventions and congresses—many of which have been uprooted from their “normal” time of year. Layering these events into an already full calendar will be tricky.

3. Higher Rates

Demand for leisure travel in some destinations is driving premium rates and limiting availability for groups. In all likelihood, there will continue to be a lot of demand from the leisure market for the rest of 2021 and 2022. However, if the there’s any delay in 2021 vaccine distribution, it’s going to push greater demand in 2022.

4. Pressure on Contracting

While many hotels are still taking the stance of “we are all in this together,” and working to create mutually beneficial terms, we have also seen hotels that are being less flexible. For example, we strengthened our language regarding force majeure and deposit protection. But when presented to at least one hotel, they responded that terms and conditions should not be changed since they were accepted at time of original contract. That inflexibility is a challenge as hotels work to protect their own interest while we advocate on our client’s behalf. Additionally, hotels are implementing their own health and safety policies and programs in response to the pandemic. Quite often, clauses about those requirements are incorporated into contracting agreements with a requirement that the group inform its attendees that they will be expected to comply with them. This may not be an issue for most clients but is something to be aware of.

Related: Learn how ITA Group helped our client operated an incentive travel program that successfully delivered on expectations while ensuring peace of mind during a global health crisis.

5. Timing & Delays

In many cases, buyers are only allowed 48-hour holds on space before hotel requires a contract request. While there is mounting pressure for the buyer market to commit, hotels can be slow to respond. They may drag their feet responding to contract addendums. Additionally, hotels are increasingly required to send contracts to their own corporate legal for review with little to no budging on redlines. Finally, due to layoffs and furloughs, many properties are still understaffed creating increased backlog of contract reviews. It’s like a game of hurry up and wait. (Worst. Game. Ever.)

Of course, this may be the exception rather than the rule, but you can begin to see how it’s very complicated for planners in today’s market to navigate.

That’s where having the right partner in your corner—a partner with strong relationships across the hospitality industry—can provide the expertise and support you need. We have experienced buyers who have their fingers on the pulse of all that is happening in the industry. As well, we have an in-house legal counsel with expertise specific to hospitality agreements that is able to offer a more holistic view based on the volume of agreements we are executing. This means that rather than leveraging the hotels templated contracts, we are able to present preferred terms and conditions that offer more mutually beneficial terms for our clients.

Related: Watch this webinar featuring ITA Group experts who share what we have learned from operating events during COVID-19.

Aside from the legalese, there are a few things you can keep in mind as you set out your plans for the year(s) to come.

Make the Most of Your Budget by Staying Local

The need for planners to be able to prove the value of their event has become more important than ever. Sixty-six percent (66%) of organizers anticipate budget cuts for their virtual, in-person and/or hybrid events in 2021. Data shows that obtaining leadership approval for an event (and consequently the overall budget for events) is contingent on being able to prove event ROI. With restricted budgets comes a growing need to properly allocate and intelligently spend each dollar. One way planners can maximize their spend is by focusing on domestic locations and presenting them in a fresh way.

“A great domestic destination that doesn’t always get the recognition it deserves is Palm Beach,” said Liz Mikkelsen, CMP, Supervisor, Event Purchasing & Industry Relations at ITA Group. “Worth Avenue is so reminiscent of a town in Europe, with its high-end shopping and great restaurants. The Four Seasons Palm Beach completed a total renovation a few years ago and it looks amazing!”

Enhance the Experience With Exclusivity

Making your event exclusive can not only benefit you by making it more likely to sell-out due to FOMO. Exclusivity can also lead to a higher grade (and higher paying) attendee and create stronger personal connections with a more intimate and engaged audience. Planners may want to consider allocating an event entertainment budget for a buzzworthy artist that will encourage the audience to share their experience via word-of-mouth marketing.

“I am pretty excited about one particular recognition program set for 2022,” said Kristine Forret, Buyer, Event Purchasing & Industry Relation at ITA Group. “Typically this group travels to Europe every year, but unfortunately had to cancel 2020 to Switzerland and 2021 to Spain. They are now going to Kiawah Island, South Carolina in March 2022. We were able to enhance the program with a variety of additional networking opportunities and are working to coordinate a private concert with top-named entertainment. Perhaps more than any other form of marketing, events build a sense of can’t-miss opportunities that keep your people intrigued.”

Handle Contracting Amicably

The events industry has been primed to expect the unexpected. Flexible policies will be essential for any live events taking place over the next year and will likely remain important for the foreseeable future. Strong partnerships between ITA and our preferred partners allows us to negotiate together with the most flexibility possible on both sides of the table.

For example, Las Vegas is always a popular destination for larger events but we’re finding 2022 and 2023 to be extremely compressed. In fact, one of our key preferred partners has only a few weeks remaining open in 2023 (which is crazy). While they have been good about letting groups shift from 2020/21 as far out as 2024 for rebooking, it’s causing compression on those years. Being able to stay on top and ahead of these trends is critically so important to ensuring event and meeting success.

Additionally, members of ITA Group’s management team sit on the advisory boards of many major hospitality brands and industry associations enabling us to leverage relationships on behalf of our clients as well as provide unique insight into industry contracting trends and legal analysis.

Want to know more about the future of event contracts, and how we create a strong contract that protects our client’s interests to every extent possible? Then you’ll want to read this.