Source: Robin Roth, Senior Contracts Editor, Conferon, Inc.
E-Specs: January 28, 2002

A form of contract that does not ordinarily come to mind is the individual reservation that a guest has at a hotel. When the hotel accepts the reservation, a mutually binding contract is formed and the hotel is in breach of contract if it overbooks and "walks" the guest. The guest walked to another hotel is entitled to financial compensation because under contract law the non-breaching party must be made "whole." A hotel may not be legally obligated to cover any more than the guest’s added out-of-pocket expenses but hotels are willing to go further in order to avoid a lawsuit and to maintain good will.

The Dishonored Reservations clause that Conferon recommends is generally well accepted by the hotels. It applies to accepted, not just confirmed reservations and it asks the hotel to pay for a room at a comparable hotel for each day the hotel cannot provide a room. In addition the hotel must provide daily round-trip transportation and two complimentary five-minute phone calls. Upon return, the hotel is asked to provide a note of apology and to make every attempt to upgrade the guest. The hotel must also give the group credit for any room nights and room revenue from walked reservations.

Experienced meeting planners like Conferon DC’s Senior Account Executive, Laurie Trautner-Black, have tips to offer for ways to handle walk situations. The hotel can be asked to relocate other groups or individuals first. Also, the list of the group can be marked with a special "Do Not Walk" protection for any VIPs or other attendees who should not be relocated. If walking guests cannot be avoided, here are steps that can be used to protect the group:

• If a smaller number of guests are to be walked, encourage the hotel to ask guests to "self select" early in the day. For some groups, simply having their first night paid for at an alternate location is enough incentive, like volunteering to be bumped by an airline. For other groups, the hotel may need to offer an additional incentive to the guests. By allowing people to volunteer to be relocated, and doing it early in the day, the late night challenges involved with a tight room situation are avoided.

When all is said and done the best walk clause to include in your contract is one that encourages the hotel to not walk your participants.

(Note: This information is not intended to be "legal advice." A qualified attorney should be consulted to review all contract issues.)