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Termination – Competing and Conflicting Groups

Managing Competitors and Conflicting Groups at Your Event Hotel

In this video, you’ll learn how to approach if a competitor is booked at the same hotel as your group. How to navigate if a competitor is in violation of your competitor clause? How to go about adding a competitor clause to your contract at your event hotel.

Experts

Barbara Dunn

(representing Groups)

Partner at Barnes & Thornburg, LLP

Lisa Sommer Devlin

(representing Hotels)

Devlin Law Firm, P.C.

Overview

  • Including a clause in your event contract that requires the hotel to not host any of the group’s competitors over the dates of the event and if the hotel does the group can cancel without any liability.

Group Perspective

  • When it comes to the competition and competing groups clause, often times there are two major areas for concern for planners:
    • Competitor groups piggybacking on your meeting. Meaning that they don’t want to be an exhibitor or sponsor but they want to draw attendees into a hospitality function, otherwise known as the suitcasing.
    • Conflicting groups. If there’s an organization that’s staying at the same hotel during your dates that is against whatever the group is doing. These conflicting groups are not necessarily competitive groups but equally as problematic for the meeting
  • If someone is booked in violation of that provision, talk it out with your hotel partner to work out a resolution. If a resolution can’t be reached then the group might seek to have the hotel terminate the contract.

Tip: Keep the lines of communication open; make sure that if there is a concern about either a competing group or a conflicting group in-house, that the group addresses that with the hotel early and often. Remember, it’s not just at the time you negotiate and sign the contract, every day leading up to the meeting where there’s a possibility of a booking of a competing or conflicting group. Doing periodic check-ins is a really good strategy for both the groups and hotels to manage this issue.

Hotel Perspective

  • Competitor clauses in event contracts. It’s typical in the industry to see a clause in a contract that says, ‘Venue will not host any of our competitors over the dates of our event and if the venue does, then, we are allowed to cancel without liability.’
  • The first thing you need to think about when you’re dealing with competitor clauses is “why don’t we want the competitor here at this time?” because that’s going to drive how your clause goes. For example:
    • You don’t want them hearing about the confidential topics that you’re discussing during your meeting
    • You don’t want the competitor mingling with your attendees in the bar after hours or things like that.
    • You don’t want the competitor in the house at the same time because you don’t want them drawing away from your meeting attendance into their attendance.
  • If it’s a competitor situation where you don’t want somebody hearing your secrets, saying, I can cancel if you book these other people isn’t necessarily going to help you. Because in this world of espionage and computer hacking, if your competitor wants to find out what you’re doing in your meeting, there are a million ways they can do it other than scheduling an event at a hotel at the same time.
  • If you think that that’s important because you don’t want people mingling, you need to have a list of stated competitors that can’t be in the hotel at the same time. Naming it by industries is not a good idea, because the hotel has salespeople locally, nationally, potentially, worldwide that aren’t going to know who isn’t allowed to be at your event at the same time.
    • Identify any competitor or conflicting groups by name but be reasonable. It’s not reasonable to prevent a hotel from booking other business simply because you’re concerned about those issues. You always have to remember even if the hotel doesn’t book other group business. Those people can be reserving guest rooms on the internet and the hotel has no idea that they’re there.

Tip: Planners and hotels should have a so you can manage that competitor issue and be very forthright about what it is you’re concerned about so that you can come up with a clause to work together on those kinds of things.

  • If it’s because you don’t want people having events that are going to compete with your event and draw your attendees away, your first consideration should be, where am I scheduling my event? If you’re worried about competing events, taking your attendees, it might not be a good idea to have your event in locations where your competitors might also be hosting events.
    • Remember: Even if you eliminate the competitors from the hotel, they could book the hotel next door and still drive your attendees away.

Tip: Considering holding your event to another place where there’s less opportunity for the competitor or conflicting groups scenario to occur

  • If the hotel does make a mistake and a competitor or conflicting group is staying at the same hotel during your meeting dates, instead of having an automatic right to cancel, you should have the clause say that the parties will sit down and work out whether or not it is still possible to go forward with additional security or something of that nature. Then, if necessary, you can cancel.