Backup Hotels in Event Contract Negotiations: Legal and Ethical Implications for Event Planners

You're deep into negotiations with a hotel. They've come down on their F&B minimum, thrown in complimentary WiFi, and your sales manager is practically booking your flights for a site visit. Things look good—really good.

But here's the question that keeps you up at night: Should you still be negotiating with that backup property? If you've ever felt guilty about simultaneously negotiating with multiple hotels, you're not alone. The tension between protecting your event and maintaining good industry relationships is one of the trickiest aspects of modern event planning. And with so much riding on every decision—budgets, timelines, stakeholder expectations—getting this balance right matters more than ever.

Let's clear the air about what's legal, what's ethical, and where the real boundaries lie when it comes to backup event venues.

The Reality Check: Multiple RFPs Are Standard Practice

‍First, let's establish the foundation: sending RFPs to multiple hotels simultaneously is completely normal, expected, and industry-standard.

Hotels know this is how the process works. They understand that when you send them an RFP, you're probably sending it to several other properties too. In fact, they're counting on it—that competition is exactly what incentivizes them to sharpen their pencils and offer competitive rates.

Think about it from the hotel's perspective. They're in the business of winning group bookings, and they know planners need options. One hotel sales manager put it perfectly: properties understand that planners must evaluate multiple venues to make informed decisions and justify their choices to stakeholders.

So if you've been losing sleep over whether it's "okay" to shop around, you can rest easy. The shopping process itself? Completely above board.

What the Law Says About Pre-Contract Negotiations

‍Here's where things get interesting from a legal perspective.

Before you sign a contract, you generally have no legal duty to negotiate exclusively with one hotel. Multiple court cases have established that commercial parties are entitled to pursue their own self-interests vigorously during the negotiation phase. The legal principle of "good faith" that governs business relationships? It typically kicks in after a contract is formed, not during the "will they, won't they" stage of negotiations.

Courts have consistently held that imposing restrictions on pre-contractual negotiations would actually deter "socially and economically useful conduct." Translation: The law recognizes that businesses need flexibility to explore options and make the best deals possible.

The Legal Bottom Line

‍Until you sign a binding contract with a property, you're generally free to:

• Negotiate with multiple hotels simultaneously
• Compare proposals and play them against each other
• Walk away from negotiations at any point
• Change your mind based on better offers

CRITICAL CAVEAT: Your legal freedom is protected, unless you use language that definitively signals intent to sign a contract (e.g., "ready to move forward," "accepting your offer") while simultaneously keeping a backup hotel engaged. Once a hotel relies on such a statement (e.g., by reserving inventory or incurring costs), you can expose your organization to liability for reliance damages, even without a signed contract.

Where Ethics Enter the Conversation

‍But just because something is legal doesn't automatically make it ethical. And this is where event planning gets complicated.

The hospitality industry runs on relationships. Your reputation as a planner—your ability to get callbacks, secure preferential rates, and build partnerships that last across multiple events—depends on how you conduct yourself during these negotiations.

The Resource Investment Reality

‍When you send an RFP, hotels don't just glance at it and shoot back a number. Depending on the complexity of your event, properties might invest anywhere from several hours to multiple days preparing a comprehensive proposal. They're:

• Analyzing your program requirements in detail
• Running availability checks across multiple date ranges
• Coordinating with multiple departments (catering, AV, housekeeping)
• Creating customized pricing structures
• Preparing floor plans and room block scenarios
• Building detailed BEOs and meeting specs

That's significant time and resources—often involving multiple team members at various levels.The ethical question isn't whether you should get multiple proposals. It's whether you're engaging with hotels you're genuinely considering, or whether you're wasting their time for leverage or backup purposes only.

Transparency: Your Ethical North Star

‍The number one best practice that emerged from industry experts, legal advisors, and experienced planners alike? Be transparent about your process.You don't need to tell Hotel A exactly what Hotel B offered (and probably shouldn't). But you absolutely should be upfront about the fact that you're evaluating multiple properties.

What Transparency Looks Like in Practice

Good transparency:

• "We're currently reviewing proposals from several properties in the area."
• "We expect to make a decision by [date] after we've completed our evaluation."
• "We're considering 3-4 venues that fit our requirements."

Poor transparency:

• Implying you're only talking to them when you're not
• Allowing a hotel to believe they're your top choice when they're not
• Continuing detailed negotiations after you've mentally committed elsewhere
• Making implied promises about selection that create legal risk (see the caution above)

One event industry professional noted that holding "non-negotiable cards close to the chest" and then "throwing curveballs at the end" damages relationships and creates unnecessary back-and-forth. Hotels appreciate knowing where they stand, even if that means they're competing for your business.

The Gray Area: When Backup Venues Become Unethical (and Legally Risky)

‍Here's where most planners start to feel uncomfortable—and rightfully so. Imagine this scenario: You've essentially decided on Hotel A. You love the property, the price is right, and you're 95% sure you're moving forward. But negotiations aren't quite finalized, so you keep Hotel B engaged as a "backup plan" or insurance policy.

You continue sending detailed specs to Hotel B. They're revising proposals, running new numbers, and investing hours into winning your business—but you're not seriously considering them anymore. You're just hedging your bets.

This is where ethical lines start to blur and, more importantly, where the legal doctrine of detrimental reliance kicks in. If you string along Hotel B after signaling definitive intent to Hotel A, and Hotel B can prove you wasted their time or kept inventory reserved in bad faith, your organization faces risk.

The Problematic Scenarios

‍The ethical concern arises when planners:

• Lead hotels to believe they're serious contenders when they're not: If you've mentally committed to another property, continuing to act like you're still deciding wastes the backup hotel's resources.
• Use backup venues purely as negotiating leverage: Keeping Hotel B engaged just to say "well, they offered free WiFi" to Hotel A isn't fair to Hotel B if you never intended to seriously consider them.
• Continue detailed negotiations after making your decision: Once you know where you're going, prolonging the process with other properties crosses into problematic territory.
• Make implied or explicit promises about selection: Using definitive language while keeping a backup engaged is not only unethical but poses a legal risk of liability for reliance damages.

The Relationship Factor

‍Remember: The hospitality industry is smaller than you think. Hotel sales managers talk to each other. They attend the same conferences, work with the same DMCs, and often move between properties within the same markets.

As one industry veteran noted, "A bulletproof contract is not one-sided. If a contract gets approved but is not beneficial to both parties, someone will end up feeling jilted and word will get out."Your reputation matters. Burning bridges with hotels you might need for future events—or being known as the planner who wastes properties' time—can come back to haunt you.

Best Practices for Ethical Venue Selection

‍So how do you protect your event while maintaining ethical standards? Here are the guidelines that will serve you well throughout your career:

1. Be Upfront From the Start: Let hotels know you're evaluating multiple properties. You don't need to give them the full list, but transparency about your process sets the right tone.
2. Engage Only Hotels You're Seriously Considering: Don't send RFPs to 15 properties when you know you'll only seriously consider 3-4. Quality over quantity protects everyone's time.
3. Respect Their Time Investment: If you've decided on another hotel, inform backup properties promptly. A quick call or email saying "we've decided to move forward with another property, but we appreciate your time and will keep you in mind for future events" is professional and courteous.
4. Communicate Clearly About Your Timeline: Give hotels realistic expectations about when you'll make a decision. If your timeline changes, update them. Leaving properties hanging creates unnecessary stress on their side.
5. DO NOT Make Implied or Definitive Promises: Avoid using any language that suggests certainty or exclusivity ("we're ready to sign," "you're definitely our top choice," "let's move forward") until you have completely concluded negotiations with all backup properties and are prepared to receive a contract. This is the line where legal risk often begins.
6. Maintain Relationships Beyond the Transaction: Thank hotels that weren't selected. Explain (briefly) what tipped the scales. Keep the door open for future opportunities. The hotel you don't choose today might be perfect for your event next year.
7. Document Your Rationale: Keep notes about why you're considering each property and what your genuine concerns are. This helps you stay honest with yourself about whether you're truly evaluating options or just going through the motions.

Making Better Decisions Moving Forward

‍The next time you're navigating multiple venue negotiations, remember:

• Shopping around is not only okay—it's expected and smart. You owe it to your stakeholders to find the best fit.
• You have legal freedom to negotiate with multiple properties until you sign a contract. However, that freedom evaporates the moment you make a definitive promise that leads a hotel to rely on your word.
• Ethics kick in around transparency and respect. Be honest about your process, engage genuinely with properties you're considering, and don't waste anyone's time—including your own.
• Your reputation matters more than any single deal. The hospitality industry has a long memory, and your professional relationships compound over time.

How Technology Changes the Equation

‍Modern venue sourcing platforms—like Hopskip—are actually making this process more transparent and ethical by design.

When you use a centralized RFP system, hotels understand from the start that multiple properties are viewing your request. The platform framework naturally sets appropriate expectations about the competitive process, removing the ambiguity that can create ethical concerns.These systems also help planners by:

• Streamlining communication so you can update multiple properties efficiently
• Creating clear audit trails of what was communicated and when (which can also be evidence in legal disputes, emphasizing the need for professional communication)
• Standardizing the RFP format so hotels receive consistent information
• Providing side-by-side comparisons that help you make genuinely informed decisions

The result? Less time wasted on both sides, more transparent processes, and better outcomes for everyone involved.

At Hopskip, we've built our platform around the idea that great events start with great partnerships—and great partnerships start with transparency. Our RFP management system helps you evaluate multiple venues efficiently while maintaining the professional relationships that make this industry work.

Want to see how streamlined, ethical venue sourcing works in practice? Book a demo with a Hopskipper, or get started for free and discover how technology can help you find the perfect venue without the ethical gray areas.

Disclaimer: The content on this blog is for informational purposes only and does not constitute legal advice. We are not attorneys, and the information presented here should not be taken as a substitute for consulting with a qualified legal professional regarding your specific situation.