Fairmont Hotels & Resorts has waived attrition penalties for select clients for 2004 meetings of at least 25 peak-night rooms booked by the end of this month. The offer also includes master bill reductions for delivering agreed-upon room block counts.
The offer is not available to the general public and is applicable only to those corporate clients invited by Fairmont to partake in the program.
"This was not offered to the marketplace and only to Fairmont key accounts," said Fairmont vice president of sales and distribution Heather McCrory. "At most, it's the top 15 percent of our clients."
Fairmont's offer nevertheless runs counter to conventional hotel industry wisdom that 2004 will be a year of tighter discounts on corporate meetings and little in the way of the wholesale discounting programs of 2003
(Meetings Today, Nov. 10). In fact, the chain that made the first and largest wave by eliminating attrition and cancellation fees for 2003 meetings
(Meetings Today, Feb. 10), InterContinental Hotels Group, will not pursue a similar program in 2004.
Though some groups very likely will be able to avoid attrition clauses in the course of contract negotiations, Fairmont's program does so before the negotiating process begins. The program includes discounts for even approaching room block counts.
In addition to waiving attrition damages, Fairmont will reduce the master bill by 2 percent if room block pickup is at least 95 percent but lower than 100 percent. If a group meets its contracted room block quote but picks up less than 105 percent of that total, the master bill will be reduced by 4 percent. Those groups that book at least 105 percent of their room blocks will enjoy a 6 percent reduction of the master bill.
Fairmont also will waive food and beverage attrition fees up to 48 hours before arrival at one of its city center properties, and will do so up to 72 hours prior to arrival at a Fairmont resort.
The chain also will offer one suite upgrade for every 40 rooms picked up per night at the group rate, a deluxe coffee break at a maximum of $15 per person and a 5 percent discount on hotel audiovisual services, as long as those services are provided by the hotel or the hotel's contracted supplier.
The deal is not applicable to citywide conventions.
Unlike Fairmont, InterContinental officials, after some deliberation, have decided not to waive attrition fees unilaterally for 2004 meetings, said InterContinental brand president of North America Jeff Senior. "I don't think the situation will be as dramatic in 2003," he said. "The circumstances are different. We had a dramatic solution in play last year, and it worked. We can assign at least 20,000 room nights to that move."
Senior said the chain believes that figure represents the minimum number of room nights the move generated, based on informal planner surveys at the time of booking. "As they booked, properties explicitly or implicitly asked lots and lots of planners. Also, some planners specifically said they booked because we did this. I love those quotes. It's a combination of planners proactively telling us and hotels asking."
Despite that, Senior sees no need to eliminate attrition fees in 2004. "When we did that the first time, planners had high levels of anxiety about signing contracts, partly because of onerous policies in hotels," he said. "We eliminated that risk. Yet, the economy is improving, that anxiety is mitigating and bookings are taking place farther out. Business is matriculating as contracted." However, InterContinental still is prepared to negotiate attrition clauses, Senior said, even without a blanket policy. Like many hotels, the chain will discuss remediating attrition damages with future business instead of hard-dollar penalties. "We'll look at rebooking credit or other alternatives," he said. "Planners don't necessarily see attrition and cancellation as negatives; they just want them to be fair."