When planning an event, negotiating hotel contracts often feels like checking a box. You’ve got the dates, the rooms, the venue—done, right? Not quite. Hotel contracts are layered with fine print, and hidden costs can quickly add up if you don’t know where to look.
Here are the top five hidden costs you’ll want to watch out for—and how to protect your budget.
- Attrition Fees
What it is: Attrition fees are penalties charged when your group doesn’t meet the contracted number of room nights. Even if you fall just short, the hotel may bill you for the unused rooms.
Why it matters: Attendance can fluctuate, and without flexible terms, you could be paying for empty beds.
How to avoid it: Negotiate a reasonable attrition clause (typically 20%) and ensure the timeline for room pickup reporting gives you flexibility to adjust.
- Resort and Destination Fees
What it is: These daily charges are added on top of the room rate and can cover anything from Wi-Fi to “amenities packages.”
Why it matters: They inflate the actual cost per room, which can be frustrating for attendees and challenging for your budget.
How to avoid it: Ask the hotel to waive these fees for your group or roll them into the room rate for transparency.
- Service Charges and Taxes
What it is: Beyond food and beverage minimums, hotels add service charges (often 22–25%) plus local taxes.
Why it matters: A $50,000 catering budget can quickly balloon once you tack on 25% service and 7% tax—turning it into closer to $67,000.
How to avoid it: Always ask for a “plus plus” breakdown in writing so you see the true cost. Negotiate where possible, and plan your budget using the total, not the base numbers.
- Meeting Room Rental Fees
What it is: Hotels often charge separately for meeting space—sometimes even when you’re already committing to a large room block.
Why it matters: These costs can be significant, especially if multiple breakout rooms are needed.
How to avoid it: Negotiate complimentary or reduced meeting space tied to your room block commitment. Alternatively, ask to apply food and beverage spend toward meeting space rental.
- Audio-Visual and Outside Vendor Fees
What it is: Many hotels require you to use their in-house AV partner—or charge hefty fees if you bring your own vendors.
Why it matters: This can double your AV budget or add unnecessary “bring-in” charges.
How to avoid it: Negotiate AV terms upfront. If you must use their in-house team, request a discount. If you plan to bring in vendors, ensure outside vendor fees are capped or waived.
Final Thoughts
The devil is always in the details. Hidden costs in hotel contracts can erode your event budget quickly if they’re not managed upfront. With the right negotiation strategy, you can minimize risk, avoid surprises, and keep your event financially sound.
At Paragon Events, we’ve helped clients save tens of thousands of dollars by identifying and negotiating these hidden costs before contracts are signed. The key is simple: know what to look for—and never sign without asking the right questions.
Ready to protect your event budget? Contact us today to learn how we can help you secure the best hotel contracts.
