The quest for the perfect event venue can feel never-ending. You have to find a venue in the right location, for the right price, with the right capacity — and that fits the atmosphere of your event.
Once you find an event venue that checks those boxes, it can be tempting to sign immediately. But don’t let the contract go unscrutinised — or you could find your event in serious legal trouble.
Before you sign on the dotted line, ask your venue these questions about their contract.
1. What is your cancellation policy?
Cancellation terms can vary enormously from venue to venue (even within the same hotel brand) so it is essential to double check the non-refundable deposit. Note the sliding scale, which typically begins on the date the contract was signed and continues in increments of number of days out prior to the event. Much depends on the size of the event; for larger events, the cancellation charge can be as much as 100% as far out as 60 days ahead of the event date.
According to the Australian Government’s Consumer Affairs division, a 10% deposit is considered the standard cancellation fee. However, a venue legally reserves the right to charge whatever is agreed upon in the contract for a cancellation. Consumer Affairs also point out that, for the client, their 10% deposit can also be considered a payment – therefore not liable for a cancellation fee unless stated otherwise.
“Deposits greater than 10 per cent of the total cost of a booking may be considered to be prepayments,” they state on the Consumer Affairs website, “which guests may not have to forfeit if they cancel their booking. Businesses should consider whether or not they need more than 10 per cent as a deposit.”
2. If the space is re-booked, will I still be charged a cancellation fee?
In the event that you have to cancel your booking, the venue should endeavour to resell the space. If successful, any payments received for such booking should be taken into account when calculating your cancellation fee. Ensure this is confirmed in your contract.
3. What happens if fewer people attend than anticipated?
Attrition (also known as ‘slippage’) is the difference between the anticipated delegate numbers and the actual numbers. Most venues will require you to pay damages if the event decreases in size, whether it be a sleeping room block or food and beverage.
The venue has a minimum amount of revenue they need to be guaranteed from your event, and the attrition is that minimum. You will need to negotiate on the slippage at contracting stage. The higher the slippage percentage the hotel accepts, the lower your liability if attendance is disappointing.
4. What’s included in the price?
Do not make any assumptions as to what may be free – clarify whether water, catering, and other services are included in room hire charges. Don’t presume “fixtures” such as the data projector in the ceiling are included in the price.
Unquoted government taxes and services charges can also come as a surprise. The fact that they are obligatory does not excuse venues from mentioning them.
5. What are your Wi-Fi capabilities and what are the costs?
Affordable, reliable connectivity is a must for today’s events, but many venues do not provide adequate information about their Wi-Fi capabilities and charges. If free Wi-Fi for delegates is provided, what are the restrictions of this connectivity? If Wi-Fi is chargeable, ensure it is packaged as part of the rate rather than as a line item.
Don’t be afraid to be demanding when it comes to connectivity. Free Wi-Fi is an industry standard.
6. Do you guarantee delegates the best rates room rates?
For residential events, you want to ensure you’re getting the best room rates. Check a couple of price comparison websites to make sure your rate is competitive. It’s worth requesting a clause in the contract along the lines of “the Hotel agrees that the special group rate for hotel rooms will remain lower than the rack rate and this rate is guaranteed.”
The ‘cut off’ date specifies when the venue will no longer hold sleeping rooms at the contracted group rate. After that date, unused rooms are released back to the venue’s inventory for resale to the general public.
That said, you should include a clause stating that rooms will be available to your attendees after this date if rooms are still available.
You should also ask the hotel to clarify its ‘walk policy.’ This is the action taken by the hotel if they overbook your sleeping room block. The hotel would be required to relocate this guest to another hotel after all options are exhausted.
7. Can I bring in outside suppliers?
Some venues require you to use in-house or preferred suppliers or will charge a fee for use of outside suppliers. Be clear about the policy; you want the best production value for your event and if you are limited in who you can partner with, it could be detrimental to your event.
8. What access can I get to the venue for set-up?
Work out how long it is likely to take to load-in and set-up for your event. Big productions can take many hours to set up and you may have to rent the venue for more than just the event day.
Request any associated fees be included in the proposal. Depending on the amount of total revenue, venues will often allow a day of set-up free of charge, which you should aim to negotiate.
Do you want to know more about how to prepare for the unexpected? Download our comprehensive guide, The Event Preparedness Playbook, to learn more about minimising the risk of failure at your next event.