Case Study

Managing a Hotel Breach of Contract & Venue Transition

Background

Paragon Events successfully managed a hotel breach of contract to a signed hotel agreement. The infringement was due to an on-site construction defect, occurring only months before a client’s annual conference. On short notice, we were informed that the contracted hotel was unable to fulfill our stated room requests, forcing us to act quickly and locate another property.

125,000

SQUARE FEET OF SPACE

800+

ATTENDEES

1,600+

TOTAL ROOM NIGHTS

Challenge

Although the hotel offered a set of concessions to rectify the situation, we reassessed our contract to determine which option would be most cost-effective for the client. The Paragon Events Team concluded that the hotel did not provide enough value to offset the shortage of rooms available. On account of the event quickly approaching, we were challenged to act expeditiously and present other options to our client. Ultimately, our strategic discussions led us to terminate the hotel contract and source another location in order to best accommodate the program’s full scope.

Areas affected by this decision include:

  • Overall program flow: The layout of the venue greatly influences the attendee experience and the flow of traffic.
  • Event planning timeline: Factoring in payment deadlines, room block cut-off dates, attrition, and vendor schedules.
  • Transportation distances: Planners typically source venues with close proximity to airports, hospitals, and metropolitan areas.
  • Layout and space management (i.e. trade show): Each space has specific square footage and fire marshal requirements. This can affect the mapping of seating charts, audio visual staging, décor, and entertainment.
  • Signage role in the space: Print items are strategically designed and placed according to a venue’s specifications.
  • Sponsorship commitments: Partnership packages may align with a venue’s opportunity for advertising or product display.
  • Attendee expectations: Respective areas include guests’ travel, requested accommodations, perception of the program, and activities booked in the surrounding area.

Making a change in venue 90 days out placed the event in a compromising situation. We acted quickly to contact our other hotel partners in search of a space and rooms able to welcome 800+ attendees and their families within a three-month planning period.

Hotel Breach of Contract | Paragon Events Case Study
Solution

As a result of our team’s expertise and our international partnerships, we successfully identified, negotiated and contracted a new location that fit the client’s needs and honored the previously agreed upon rates and concessions. It was important that we put forth special care to ensure we were not sacrificing the contracted and expected terms of our original agreement or falling short of the client’s expectations. In the end, we were able to upgrade from a 4 to a 5-star hotel, guarantee complimentary amenities for guests, and lock in a flexible attrition rate and deadline.

Once contracts were signed with the new property, we then began the process of notifying attendees and rebooking rooms with specified requests.

Essential Communication Steps in a State of Rebooking:

  1. Notify the immediate stakeholder. Always keep clients in the loop so they are a part of the conversation and understand potential changes in the location details, budget, and timeline.
  2. Inform attendees with next steps. Outline a comprehensive communication plan for clients to alert attendees of confirmed changes to the program. Be sure to define appropriate messaging, channels and frequency.
  3. Consistency in communication. Develop a clearly stated script for the former property, current transportation partners, and new hotel to provide attendees with up-to-date, accurate information.

Rebooking can be a daunting challenge. It is vital to handle it as swiftly as possible since it can have a ripple effect on the attendee experience. Paragon Events was diligent in confirming that all registered attendees were adequately rebooked with previously requested room types and amenities.

PRO TIP: As an industry standard, all good contracts should include a construction and renovation clause, which states that the program will be executed without disruption. As with any contractual issue, communication between both parties is essential. If either party is not immediately notified when a breach of contract takes place, it may lead to a request of financial reconciliation or even a break of contract.

Outcome

We were able to use this unique scenario to our client’s advantage by leveraging our negotiation strategies to reduce further expenditures. Paragon Events led the hotel contract management process which resulted in additional cost savings:

  • Saved our client $110,000 due to room rebates being doubled
  • Reduced costs by transitioning an event that was originally off-site to a venue centrally located and owned by the new property
  • Negotiated a deeper discount for food and beverage between 10-15%
  • Secured customized pricing on specific items, including breakfast buffets, bartender/chef fees, and a 5-minute firework display that was well known to property
  • Waived key fees, including WiFi in the meeting space, rigging costs, freight and shipping rates

Beyond the financial success, the most invaluable outcome was our proven ability to maintain a seamless experience for our client and their attendees. Our team made it a priority to handle the details of the program’s disruption internally and present our client with solutions, rather than obstacles. 

Conclusion

Cultivate strong, mutually-beneficial relationships with hotels and other venues to support planners’ initiatives and client needs. Establish an understanding and collaborative partnership that both parties can work to develop a successful program, built on trust and transparency. Even in moments of friction, it pays to be respectful and provide feedback that can lead to greater improvement within the industry and the objectives of stakeholders. You never know when you could cross paths later down the road, where services could naturally synch up and your expertise is needed.

Effective client management requires exceptional service as well as proficiency in contractual terms and provisions. We meticulously review and comb through agreements with close attention to ensure that everything aligns with the intent, expectations, and financial benefits of an event. Financial management continues to remain a strong suit for the Paragon Events Team. Together, we work with the client to develop their budgets and contingency plans, factoring in any potential diversions or opportunities that arise.

For more information on our Event Management services, please contact us.