Source: Robin Roth, Senior Contracts Editor, Conferon, Inc.
E-Specs: September 22, 2003

If you sign a contract that holds 100 rooms for three nights, you naturally assume that the hotel is really holding 100 rooms for each night, right? You may be surprised to learn that the hotel could be holding fewer rooms than your contracted commitment if your history doesn’t support your block or if the hotel doubts that you can actualize the full block each night. This practice is affectionately known as "blind cutting," whereby the hotel reduces the block in its property management system without prior notification to the meeting planner. Since most groups do not pick up 100% of their contracted rooms, hotels maximize their yield, as do airlines, by overselling. Hotels also blind cut. The blind cutting percentage can range from 4% to 20% and sometimes more. Normally it is less than 20%. What is the best way to be sure that the number of rooms that you contract for are indeed loaded into the system and protected?

• History is critical. Make sure that an accurate night-by-night history is provided to the hotel. Three years is desirable and two years is a must. For first time meetings, it is essential to provide history from other first time meetings that you have organized.
• Communicate to the hotel your normal no-show or "wash" factors and your reservation booking pace data (if you track).
• Build a relationship with the hotel sales and service personnel in order to have open communications about the number of rooms actually being held.
• Have contract language requiring the hotel to provide notification of a block reduction to the planner.

While we don’t condone blind cutting, we do believe that room blocks must be earned and that good block management will limit the blind cutting from hotels.

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