Amendments For Cancelled Covid Meetings
You’ve decided to move your conference to non Covid 19 dates. CHECK. But, what now? What terms do you need in your updated date change amendment to be sure you are protected for the new meeting?
We, at HPN Global, are calling it a "Lift and Shift" when a client wants to move their 2020 meeting to a later date in 2020 or a future year. For all of my “Lift and Shift” meetings, there are specific clauses I like to get into the date change amendment or addendum for each client depending on their circumstance. Below are the clauses and the reasons why: (for samples of these clauses, reach out to me anytime, and I am happy to share)
Lowest Rate Clause OR Economic Impact Clause:
I like to have one of the two of these in the revised agreement because we don’t know if the rate the hotel has given us today will be higher than what the market will demand over the next 18 months. So much can happen—a second wave of Covid, demand can change and online marketing channels can reduce rates or be aggressive with room rates. Having one of these two clauses in your meetings contract will enforce the hotel to either drop the rate to the lowest rate seen online through all booking channels OR it will create a promise between the hotel and the client to review the economic conditions 60 days prior to arrival to see if the rate is fair and in line with current market conditions. If it is not, the hotel and the group agree to renegotiate the rate in good faith. At the end of the day, the hotel wants you to perform and pick up your guest room block. The hotel is doing its best, at the time of signing the agreement to make a guess at what will happen in the world and with their own demand based on what they currently have booked and what is in their comp set or city. As we all know, nothing is predictable right now and the rates, for now, are a best guess based on current conditions. If the conditions change, the rates may be too high. Having one of these two clauses protects you from your attendees paying more than anyone else booking the hotel and helps keep attendees staying at your hotel within the room block.
Modified Force Majeure or Impossibility Clause:
In so many cases the original Force Majeure or Impossibility Clause meeting planners have in their contract only covered them if hosting the meeting was illegal or impossible. As we know, the Federal Government didn’t make traveling or holding a meeting illegal or impossible during the Covid 19 crises. I had many spirited conversations with the client’s lawyers and general counsel about the interpretation of this language in each contract. Most clients, their lawyers and hotels each interpreted this section of the contract differently, and it caused a lot of back and forth and confusion. In most cases, I was left to my own devices to be up-to-date on the local, state, county and city directives, bans and orders. If we could prove the city had a gathering ban, then we could use the word “Government Regulations” in the force majeure as a reason to terminate the agreement. However, the word “Government Regulation” was not in all contracts AND not all cities/counties/states had clear regulations noted. The CDC only issued “Guidance” and “Recommendations” which wasn’t enough for some hotels to allow Force Majeure. And if your meeting is more than 60 days out, many hotels don’t consider this Force Majeure either. This is where things continued to get fuzzy. To prevent the fuzziness in the future, I recommend having the words government regulations, guidance and recommendations in your revised Force Majeure clause. I also like to have the words pandemic and epidemic in the new clause. Pandemic covers a larger area—like Corona Virus—which was a global pandemic. Epidemic is a regional or localized term. If something is in the city or state of the hotel hosting the meeting OR the city or state of your corporate headquarters preventing 50% or more attendees from traveling to the meeting. You don’t have to rewrite the entire clause, just insert a couple sentences from what you think is missing. Chances are your original clause did not cover pandemic or epidemic and didn’t address the difference between guidance and regulation.
Other key elements of the date change amendment:
Revised cut off date.
Revised cancel schedule. If you’re moving your meeting to more than a year out, you may want to tweak the tiers on this so you have a lower percentage due between now and 250 days prior to the meeting then revert to normal tier from there.
All deposits paid will be credited to 2021 meeting. (or year of meeting where you’re moving)
Also, you don’t have to have this in the amendment but you may want to ask the hotel what their health, safety and sanitation plans are. Keep this on file and review it 90 days before. Ask the hotel if anything has changed so you have on file and can be sure your conference plans are in line with hotel’s plans.
I’ve done 52 of these date change amendments over the last three months and have become an unexpected and certainly unwanted Covid expert as it relates to cancelling or “Lifting and Shifting” dates. If you need help moving your program or just want to talk through clauses, reach out to me anytime. I am here to help:
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