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Buyers push standard addenda: seek protection from risk, cancellation damages, food & beverage surcharges and outdated hotel contracts.

Article Excerpt
A growing number of corporate meeting buyers are attempting to use standard addenda in their contracts with meeting vendors to protect their companies from risk and mitigate fees and surcharges, according to an exclusive survey of 220 corporate meeting buyers. However, since acceptance of these addenda is negotiated on the property level and are dependent on local market conditions, consultants said their effectiveness is limited and even could be risky for companies that rely too heavily on them.

Buyers, however, said these addenda are part of overall corporate mandates, driven by procurement or legal departments, and that many hotel contracts are out of date, useless or insufficient.

Nearly one-third of respondents said their companies use a standard addendum in meetings contracts, and another 9 per cent said their companies planned to begin doing so in 2006. Cancellation and food & beverage clauses were the most common elements of these addenda, but the majority of standard addendum users include clauses on fees and surcharges, attrition, audiovisual services and payment. Most respondents, 77 percent, said their vendors had not changed their flexibility on the use of a standard addendum during the past year--but 17 percent of buyers said their vendors had become less willing to accept riders. Buyers said local market conditions and relationships with suppliers drive vendor flexibility.

"The big thing with any kind of addenda or rider is that you have to get the other side to agree to it," said hospitality industry attorney Jonathan Howe, who is president and senior founding partner of Chicago-based Howe & Hutton Ltd.

In general, standard...

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