Attrition Reduction Strategies
By D. Benson Tesdhal
November 1, 2012
Because the internet has made it so easy for
people to compare prices and obtain last-minute discounts on
hotels, many organizations discover, to their dismay, that
event attendees have booked their rooms at nearby hotels
because they obtained a cheaper rate, instead of staying at the
The result of such price shopping by attendees is that the
organization sometimes cannot fill a sufficient percentage of
its contracted room block at the headquarters hotel and must
pay attrition damages. With some creative thinking, however,
there are a number of strategies that you can employ to prevent
this kind of attrition from happening.
Some organizations have been successful at filling their room
block by encouraging attendees to stay at the headquarters
hotel. This is accomplished in a few different ways.
First, some organizations have set a hard-and-fast policy that
a person cannot register for and cannot attend the event unless
the person can show proof - both at the time of registration
and also at the time of attendance - of having a valid
reservation at the headquarters hotel. However, this policy can
be difficult and time consuming to police.
Other organizations use a softer approach, and offer a lower
meeting registration fee if the person simultaneously books a
room at the headquarters hotel. The only catch is that some
cross-checking must be done to ensure the person does not
cancel the hotel reservation after registering and stay at a
different hotel after securing the discounted event
registration fee. One way to preclude this is to make room
Another option is to offer attendees early-bird room discounts
of 10 to 20 percent for those who book by a certain date with
the headquarters hotel. This forces people to fill the block
early and gives the organization an advance cushion of
A variation on the above idea is to offer a limited number of
new attendees the chance to book a guest room at some
incredible discount that is simply too good to pass up. This
could be something like 50 percent off the listed price, with
the meeting sponsor quietly paying the hotel for the 50 percent
balance of the room price.
You may wonder why any organization would be crazy enough to
eat that much in room fees. The answer is one of simple
mathematics. Let's say that the hotel contract stipulates that
90 percent of the room block must be filled or else the meeting
sponsor will have attrition damages equal to the cost of the
shortfall. Assume further that rooms are selling for $200 and
that two weeks before the meeting, the sponsor can see that it
will fall 20 rooms short of filling 90 percent of the block.
The normal attrition damages in this example would be 20 rooms
multiplied by $200, for a grand total of $4,000 in fees.
However, if last-minute attendees willing to pay half price
could fill those 20 rooms, the meeting sponsor only has to pay
the other half of the cost of those rooms, which would be
Those who booked their rooms early may be mad that last-minute
attendees received 50 percent off the price of their rooms, a
policy that seemingly rewards procrastination. But this kind of
policy can sometimes be justified if those receiving large room
discounts are limited to people who have never attended the
sponsor's meetings in the past, or if the discounts are only
offered to people who also agree to pay dues to join the
org-anization or incur some other cost. In other words, large
room discounts can sometimes be justified as a one-time
membership recruitment incentive.
Ben Tesdahl, Esq. is an attorney concentrating in nonprofit, corporate, tax, and contract law, including meetings and convention law. He is with the law firm of Powers, Pyles, Sutter & Verville, P.C. in Washington, DC. He can be reached at (202) 466-6550 or at firstname.lastname@example.org.
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