How Do Group Hotel Rates Work?

August 22, 2019

Not sure how group hotel rates work? Our in-house team of group experts book special reservations for our members every day, and we wanted to share our insights into this often-complex hotel booking topic.

Criteria for a group hotel booking

With almost every hotel the standard definition of a group hotel booking is a signed contract guaranteeing the hotel 10 rooms or more per night for an agreed upon date or dates.

Know what you need from the hotel

The more organized you are with what you will need from the hotel, the more likely hotels are to offer you a desirable deal. Before contacting a hotel you’re interested in, make sure you plan out exactly what you will need:

How many rooms
The type of rooms (i.e., 25 standard kings, five deluxe kings, and two suites)
The dates that would work for your stay — flexibility can help in getting a great discount
Whether or not you will need conference space, A/V services, beverage service, meals, etc.

What the hotel will need from you

When you make your reservation, the hotel will need a variety of information from you about the group, including:

The name of your event
Your contact information
Billing contact information
Contract signing contact information
How many rooms you will need
The type of rooms
How much conference or meeting space you will need
If you have any flexibility with your dates
The nature of your event (wedding, retirement party, work meeting)
A deposit

Giving them all of this information upfront is not only required but also helps the hotel staff anticipate needs you might not be considering. If you don’t have all this information upfront, the hotel team can help you through it.

‍

‍

What to know about signing a group booking contract

While some people will sign a contract without reading it carefully, we highly recommend you understand the nitty gritty of it. A few important parts of the contract you will want to make sure you understand include:

Verbiage around an “act of God”

If an act of God — such as a hurricane or a flood — were to occur and your guests were physically not able to make it to the hotel, make sure the contract would not require you to pay under these circumstances.

Hotels are often, understandably, very careful about the language in this clause. They usually only apply to timeframes where it is impossible and/or illegal for the hotel to accommodate your guests.

If you’re unsure of the exact terms in this clause, ask the salesperson to send you a plain word explanation in writing.

Indemnification

This is an important thing for event planners to understand as it applies to the safety of the guests and the legal liability of you and the hotel. Put simply, this clarifies who is legally responsible for what. For example: If one of your travelers slips and falls in their hotel room, you’ll want to make sure that the contract does not hold you legally liable.

Similarly, if something happens that is not directly related to the safety of the hotel (i.e., two of your travelers get in a fight and some is injured), the hotel will make sure it is not legally liable for those injuries.

Attrition

Most hotel contracts allow for around 20% attrition. This means you will not be penalized if up to 20% of your guests do not arrive. If more than 20% of your guests do not show up, then you will still be financially responsible for those guests.

Hotels typically want to measure attrition by room night, but it's often best for you to ask for attrition to be considered for the entire length of the stay.

For example: If your contract requires 80 occupied rooms over a period for four days, it would not matter if it’s 20 rooms each night or 10 rooms the first night, 30 the second and third nights, and 10 the fourth night.

The hotel just wants to ensure it can recognize the agreed upon revenue within the established dates.

Cancellation

Cancellation clauses for group bookings are typically written so that the fee payment amount increases as you get closer to the date(s) of your stay. This means that the further out from the arrival date that you cancel, the lower the fee will be because the hotel will have more time to refill those rooms. If you cancel close to the arrival date, the cancellation fee will be higher.

If you are booking hotel rooms well in advance, make sure you understand the cancellation policy and timing of what you will owe and when you will owe it.

Resale clause

Savvy hotel booking professionals like to add a resale clause to their contract. A resale clause indicates that you’re not responsible for rooms you originally reserved but did not ultimately occupy — only if the hotel is able to find other guests for those rooms. With the resale clause, you will also want to agree to the room rate you will pay if your rooms go unoccupied. The two primary rate options are the “first resold rate” (the higher rate assigned to a room the day the contract is signed) or the “last resold rate” (the last-minute rate hotels often offer to fill the rooms).

Many hotel companies will not sign contracts with a resale clause in it, so you must ensure that you have a good understanding of your room and space needs. The hotel team can help you if you’re not sure, but resale clauses usually end up in court in the case of dispute — so hotels want to avoid adding them into contracts.

Know what hotels to look for

What rooms you are going to get and the offer you will be given is based on a number of factors, including desired dates, seasonality, demand, hotel type, number of rooms needed, types of rooms needed, days of the week, the location of the hotel, and hotel amenities.

For example: Hotels with 35,000 square feet of meeting space are not going to be as willing to give a large discount to a group that needs 30 rooms as they will be a group that needs 300 rooms. And hotels that cater to business travel will have more vacancy during major holidays and weekends than Tuesday through Thursday.

Booking hotels for groups can often be complex and time-consuming. You have to prepare a lot of information, call around at hotels to find the best deal, put down deposits on rooms and amenities, and more.

So why should you spend hours researching and making your group reservations when there is someone that can do it all for you? Our Groups team will collect your event information and then leverage our hotel network and collective buying power to get you the best deal possible. In other words, you can let Engine handle it all for you!

Learn more about our white-glove groups service and request options for your next stay.

This article was written by Anwar Musa, Director of Supplier Relations at Engine.

Article written by

Audrey Fairbrother

Audrey Fairbrother is the Content and SEO Manager at Engine. She spends her days writing about all things business travel, researching topics that are important to Engine's audience and cultivating the company's brand voice.