How Do Hotel Room Blocks Work? The Ultimate Guide to Understanding Team Retreat Contracts with Hotels | Offsite

One of the most important ways Offsite serves our clients is by helping them negotiate and contract with hotels for their upcoming team retreats.

Clients have consistently told us that finding affordable, boutique, and remarkable venues is their biggest pain point in planning an Offsite.

From finding a hotel (or venue) that provides the right environment for a specific type of Offsite, for a company's unique culture, and at the right price for the budget allocated, there are countless ways for venue selection to become time-consuming, expensive, and stressful.

Not only is finding the right venue challenging, but knowing who to negotiate with at each property can be tricky, and understanding contract terms used by the hospitality industry is a skill that takes years to master if you're to know what specifically to look for in saving both time and money.

Thankfully, the Offsite team has decades of collective hospitality experience, and we've built a curated marketplace of over 100 boutique properties around the world where we've:

• pre-negotiated rates to save our clients money,
• improved contract standards for the benefit of our clients on everything from Attrition to Force Majeure (we will explain both of those terms in this guide),
• and developed an ongoing relationship with our hotel partners to ensure our clients receive the best possible on-the-ground experience during their team retreats.

With the help of Kristin Hoogheem, Offsite's Marketplace Development Lead responsible for overseeing hotel negotiations and contracting between our clients and venue partners, we've developed the following guide to answer Frequently Asked Questions, explain popular hotel contract terms, and describe the various ways Offsite is able to save our clients money through our curated marketplace.

Before joining Offsite, Kristin was recognized as a “Future Leader in Travel” and worked in the travel industry for nearly a decade creating business and leisure trips worldwide for global CEOs, corporations, affinity groups and entrepreneurs. She co-founded and ran a successful travel company planning group and luxury travel for high net worth individuals and their organizations.

Needless to say, she knows her stuff!

Before we go into Frequently Asked Questions, let's start with popular contract terms you might come across, so you know exactly what they mean for you and your company.

Palihouse Miami Beach, one of the hotel's in Offsite's curated marketplace

What is a Hotel Room Block?

A hotel room block is a group of hotel rooms reserved specifically for an event at a pre-negotiated group rate. This arrangement ensures that all attendees have a place to stay at a discounted rate, making it a convenient and cost-effective solution for event organizers. By securing a hotel room block, you can guarantee that your team or guests will have accommodations close to the event venue, which simplifies logistics and enhances the overall experience. Whether you’re planning a corporate retreat, a wedding, or a large conference, booking a hotel room block can save you time and money while providing peace of mind.

Types of Hotel Room Blocks

When planning an event, understanding the different types of hotel room blocks is crucial. There are two main types: contracted and courtesy room blocks.

• Contracted Room Block: This type of room block requires a deposit and comes with specific cancellation policies. It involves a formal agreement between the event organizer and the hotel, outlining the number of rooms reserved, the rates, and the terms of cancellation. Contracted room blocks often offer more favorable rates and additional perks, but they also come with financial commitments and penalties for not meeting the agreed-upon room nights.
• Courtesy Room Block: Unlike contracted room blocks, courtesy room blocks do not require a deposit and offer more flexible cancellation policies. The hotel sets aside a certain number of rooms for your event, but there is no financial obligation if the rooms are not booked. This type of room block is ideal for smaller events or when you are unsure of the exact number of attendees. However, the rates may not be as competitive as those in a contracted room block.

Understanding these differences will help you choose the right type of room block for your event, ensuring you get the best value and flexibility.

Popular Contract Terms (And What They Mean)

When negotiating a hotel room block contract, it’s essential to understand the key terms that will impact your event. Here are a few crucial terms to know:

• Attrition: This term refers to the reduction in the number of reserved rooms or services from what was initially contracted. Hotels use attrition clauses to protect themselves from financial loss if the actual room pickup is less than expected.
• Attrition Clause: This provision in the hotel contract specifies the number of rooms that can be released without penalty. It outlines the allowable slippage, which is the percentage of rooms that can go unbook without incurring additional charges.
• Room Night Commitment: This is the total number of rooms booked by the group, which serves as the basis for calculating attrition. It represents the hotel’s expectation of how many room nights will be utilized during the event.
• Actual Usage: This term refers to the number of rooms actually used by the group. It is compared to the Room Night Commitment to determine the amount of attrition and any potential penalties.

Understanding these terms will help you navigate hotel room block contracts more effectively, ensuring you secure the best deal for your event.

Managing Hotel Room Blocks

Managing hotel room blocks can be a complex task, but with the right strategies and tools, it can be simplified. Here are a few tips to help you manage your hotel room blocks efficiently:

• Use Event Housing Management Software: This software can streamline the process of booking and managing hotel room blocks. It allows you to track reservations, monitor room pickup rates, and manage attendee information in one centralized platform.
• Track Hotel Cut-Off Dates, Pick-Up Rates, and Confirmation Statuses: Staying on top of these details is crucial for effective room block management. Ensure you are aware of the cut-off dates for reservations, monitor the pick-up rates to see how many rooms have been booked, and confirm the statuses of all reservations to avoid any last-minute surprises.
• Release Any Vacant Rooms to Avoid Being Charged: If there are unused rooms in your block, it’s essential to release them before the cut-off date to avoid being charged for them. This will help you manage your budget more effectively and prevent unnecessary expenses.

By following these tips, you can manage your hotel room blocks more efficiently, ensuring a smooth and successful event.

Negotiating a Fair Hotel Block Contract

Negotiating a fair hotel block contract is crucial to ensure the success and profitability of your event. Here are a few tips to help you negotiate effectively:

• Research Hotel Room Prices and Compare Options: Before entering negotiations, research the market rates for hotel rooms in your desired location. Compare different hotels and their offerings to understand the going rates and identify the best options for your event.
• Negotiate Room Block Prices and Add Special Services or Extras: When negotiating, don’t just focus on the room rates. Consider adding special services or extras to the contract, such as complimentary meeting space, free Wi-Fi, or discounted parking. These additional perks can enhance the overall experience for your attendees and provide more value for your money.
• Use Event Housing Management Software to Streamline the Process: This software can help you keep track of all the details during the negotiation process. It allows you to manage multiple hotel contracts, monitor room block performance, and ensure all terms are met.

By following these tips, you can negotiate a fair and favorable hotel block contract that meets your event’s needs and budget.

Popular Room Block Contract Terms (And What They Means)

While Offsite takes the guesswork out of finding, negotiating with, and contracting with hotels for team retreats, you might find yourself interested in the meanings of various contract terms.

The following are some of the most popular and consequential contract terms you’ll find as you secure your room block with most hotels.

Resort Fees - A resort fee is an additional charge that is added to the cost of a guest’s stay at a hotel or resort. These fees are usually added to cover the cost of amenities such as swimming pools, fitness centers, and other recreational facilities. Some hotels may also include the cost of internet access or other services in the resort fee.

More often than not, Offsite is able to reduce or remove these Resort Fees altogether, saving clients up to thousands of dollars on room blocks.

Concessions - Concessions are discounts or other benefits that a hotel may offer to a group in order to secure their business. These concessions could include waived resort fees, waived or discounted meeting space fees, room upgrades, and reduced room rates.

To that end, Offsite has pre-negotiated 15-40% retail rates for our clients for most times of the year and group sizes.

Attrition and Allowable Slippage - Attrition is a term used to refer to the percentage of rooms that are not booked as part of a group’s room block.

Hotels often include an attrition clause in their contracts to protect themselves in the event that a group does not fill their entire room block, as well as Allowable Slippage which states how many rooms can be dropped (and by what date) without penalty.

Offsite attempts to increase Allowable Slippage for our clients, while also advising clients during contracting on the proper number of rooms to go under contract for in the first place, in order to avoid expensive Attrition penalties that may represent hidden or unnecessary costs in planning an Offsite.

Understanding room block attrition is crucial in hotel contracts and negotiations for group bookings. Attrition clauses outline the allowable percentage of rooms that can remain unbooked without incurring penalties. Different types of attrition can impact costs based on event performance and other measurable factors, making it essential to secure favorable terms.

Force Majeure - Force majeure is a clause that allows for the cancellation or postponement of an event due to circumstances beyond the control of the parties involved. This could include natural disasters, pandemics, acts of God, or other unforeseen events.

After COVID-19, it was important for Offsite to protect our clients by ensuring airtight Force Majeure clauses with hotels in our marketplace, so that our clients would be protected from pandemics, as well as hurricanes or other unforeseen issues that could jeopardize the deposits set forth on room blocks, catering, and more with team retreat venues.

Porterage - Porterage is a fee that is charged for the handling and transportation of luggage. This fee is often included in the cost of a guest’s stay at a hotel.

Typically, we don’t see additional porterage charges outside of resort fees or the cost of room nights.

However, in the event you need to ship swag, event supplies, furniture, or anything else to a venue ahead of your team retreat, it’s important to ask the hotel in advance if there might be associated Porterage to consider in your budget.

Incidentals - Incidentals are additional charges that may be incurred during a guest’s stay at a hotel, such as room service, in-room movies, or other services. These charges may be added to the guest’s bill at the end of their stay.

As we explain in the Frequently Asked Questions below, it is important for you to tell the hotel which Incidentals you’d like to be billed to a master account, and which fees you’d like passed on to your attendees directly.

Pre/Post Dates - Pre/post dates refer to the dates before and after a group’s main stay at a hotel. These dates are often included in a hotel contract to allow a group to extend their stay at a discounted rate.

Let’s say you have a team retreat and book your rooms at a hotel for June 1-3. If there is additional availability, many hotels will allow for a discounted rate 2-3 days before and after the group dates.

In this scenario, it may be reasonable to get pre/post dates allowing any members of the group to extend their stay at the hotel as early as May 30 and as late as June 6 at the same room block rates.

Deposit Schedule - A deposit schedule is a plan for paying a deposit to secure a group’s booking at a hotel.

The schedule may include multiple payments at different stages of the planning process, such as a deposit at the time of booking and a final payment closer to the event date.

Typically, there is a 50% deposit at the time of booking and a final payment 30 days before the event, but this can sometimes be as little as two weeks before the event.

Cut-Off Date - The cut-off date is the final date by which a group must confirm their booking at a hotel. This date is usually included in a hotel contract to give the hotel time to prepare for the group’s arrival.

We typically try to get this down to as little as two weeks for Offsite clients, but most hotels prefer 30 days in advance of the event as their cut-off date.

Early Departure Fee - An early departure fee is a charge that is applied to a guest’s bill if they leave a hotel before their scheduled departure date.

This fee is often used to compensate the hotel for the loss of revenue from the unoccupied room.

Relocation Clause: A relocation clause is a provision in a hotel contract that allows the hotel to move a group to a different room or location in the event of unforeseen circumstances, such as maintenance issues or overbooking.

Room Night Commitment - This term refers to the total number of room nights that a group commits to booking at a hotel. The total room block influences attrition clauses, dictating the allowable amount of room reduction without incurring penalties. It is crucial for planners to monitor their room usage against this total to avoid financial losses.

Should you end up working with Offsite, we will happily explain any and all remaining contract terms to you that you find confusing, as we work to save you time, money, and stress in booking the venue for your team retreat(s).

By booking with hotels in our curated marketplace, you can be assured that we’ve pre-negotiated the best rates and contract terms on your behalf, while also holding vendors to our own contractual standards of service and responsiveness.

Now that you know these popular contract terms, let’s unpack some of the Frequently Asked Questions we receive from clients as they’re booking their offsite venues.

AutoCamp, one of Offsite’s venue partners, with properties in and around San Francisco, New York, Los Angeles, and other popular Offsite destinations.

Hotel Contracts FAQs: "Know Before You Go"

What do I need to prepare before Offsite sends RFPs (Request for Proposal) on our company’s behalf?

Having the following information at-the-ready will reduce the amount of back-and-forth needed with hotels in Offsite’s marketplace.

• The dates for your team retreat
• Any alternative dates you would consider to save money, or in the event the hotel does not have availability for your first choice dates
• The number of attendees for your team retreat
• The number of rooms you’d like in your room block (i.e do you want all attendees to have private rooms, or do you wish for some or all of them to share rooms to save money)
• Any estimated “room nights” you may need before or after the majority of your group’s visit (i.e do you need a few more rooms available the days leading up to your team retreat, or after the retreat)
• Any meeting space needs
• Any A/V (audio/visual) needs
• Any food and beverage needs you have for the hotel (should you wish to utilize the hotel’s catering team for some or all of your group’s meals, which is recommended because it reduces complexity in planning a team retreat while also allowing us to negotiate better room block rates and discounts/concessions on your behalf)
• Decisions on what type of charges should be made to a master account paid by the company (such as nightly room rates, taxes, parking, and incidentals), and which charges would be left to attendees (such as room service or additional room nights not covered by the company)
• Consideration for out of town guests when estimating the number of rooms needed and ensuring easy booking processes for them

While it is not necessary for requesting RFPs, when you’re ready to sign any contracts, you will likely need to provide:

• Information for the signee for the contract, which could be yourself, your company’s CFO, or some other internal contact who will need to provide their full name, title, email address, and phone number
• Your company’s Tax ID number
• Final check-in and check-out dates, including any requested room nights before and after your team retreat

Our attendee count may change. How many rooms should I reserve?

Hotel contracts include an attrition clause which tells you the number of rooms you can release without penalty.

As the hotel is taking rooms out of inventory for your group, they have the right to charge a penalty if the actual room pickup is less rooms than what the attrition allows.

We recommend contracting the number of rooms you anticipate needing to secure enough rooms at the group rate, and while we will increase the Allowable Slippage as much as possible, you should contract as accurately as you can. Additionally, consider utilizing multiple hotels to accommodate guests effectively and ensure enough room availability.

What if I need to add more rooms or meeting space after we’ve contracted?

Additional rooms will be subject to hotel availability and updated rates. Generally, it is a lot easier to add rooms or meeting space than cut them out, so we recommend being more conservative with your room block to prevent unnecessary spend on Attrition, then overbooking your room blocks.

If there is a significant change in the group room block or meeting space needs, we would work with the hotel to create an addendum to your contract.

Do contracts I receive via Offsite include pre-negotiated rates?

Yes! The group rates we provide after sending RFPs on your behalf have been negotiated to the best of our ability, and we also work to earn you and your company other concessions and discounts as well.

One of the benefits of working with Offsite is that we work on your behalf with hotel partners in our curated marketplace to extend the best value for your group in addition to saving you countless hours in searching for, negotiating with, and contracting with hotels for your venue needs.

That being said, if you increase your total spend at hotels, you may be able to negotiate further discounts. For example, if you give the hotel most of your catering needs for your Offsite, they may further discount or waive the fees associated with meeting spaces, A/V, or more.

Will we pay the deposit to Offsite or the hotel?

Currently, agreements are contracted directly between clients and our venue partners. In other words, you ultimately sign a contract with the hotel directly.

A deposit will be due upon signing the contract and many hotels accept a credit card through a secure payment link.

If a wire transfer is preferred, the hotel will provide those details for payment and you or your company will pay the hotel directly, not Offsite.

Why does the contract show a commission to Offsite?

Sometimes, you may find wording in a contract that states the commissions Offsite will receive from your signing of the contract.

As an industry partner, we have credentials that generate a commission from preferred partners. This is nothing new; travel agents and similar companies to Offsite have earned commissions from facilitating group travel.

The good news is that the rates reflected in these agreements reflect the best rates the hotel will offer for your group, meaning if Offsite were to forgo commission for some reason, it would not change the group rates offered by the hotel. These commissions typically come out of a hotel’s marketing or sales budgets, and therefore do not impact the deals we can earn for you.

When do we send the room list?

The hotel requires a list of attendees with their check-in and checkout dates by the “Cut-Off Date” listed in the contract.

Can I make changes to the contract after we sign?

Once the contract is written up, any changes to dates, number of rooms, meeting space or other details requires back and forth with the hotel and re-confirming availability.

Also, the rooms and group rates may change until contracted.

Providing the most accurate details in advance (like number of attendees, correct event dates, meeting space or catering needs, and more) will ensure a smooth contracting process.

Hasbrouck House, one of the hotel’s in Offsite’s curated marketplace

How Offsite Saves You Time, Money, and Stress In Booking Venues For Team Retreats

To-date, we’ve saved clients over $500,000 on room blocks by managing Requests for Proposals, negotiating, and contracting on behalf of our clients. Booking hotel blocks for events such as weddings, sports tournaments, and music festivals can provide significant financial benefits and best practices include early outreach to ensure availability and favorable rates for attendees.

While we’ve pre-negotiated 15-40% off room blocks in our curated marketplace, our clients save an average of 20% off room rates despite traveling to popular cities, in-season, in many cases. Managing room bookings for events is crucial, and negotiating terms based on the event's overall performance can lead to better deals and smoother logistics.

We also help our clients secure additional discounts on food and beverage, meeting space, and other fees. Wedding hotel blocks offer benefits such as securing better room rates and additional bonuses, making them an excellent choice for wedding planners.

We’ve planned ~100 offsites in the last 12 months alone in the most sought-after locations worldwide, and have narrowed down the best hotels and venue partners (after looking at thousands of potential Offsite venues) that deliver a unique, elevated experience with great service, fair rates, and everything your team needs for a successful offsite. Setting up a wedding room block at hotels facilitates room bookings for wedding guests and provides unique links for easy online booking.

We take on all the details from requesting availability, negotiating rates and reviewing and editing contract terms.

As specialists in group contracting, we save clients countless hours of back-and-forth with the venues.

Want to learn more?

Click here to get started in planning your next team retreat with Offsite!