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Corporations and associations have outsourced meeting-planning functions to third-party planners, who are independent contractors. While the corporations and associations remain responsible for the meetings’ content, independent planners typically handle all other details, in particular, finding venues and negotiating contracts. Most of an independent planner’s business depends on a reputation for fair dealing, referrals, and continued relationships. Thus, the best planners are careful to ensure that all parties are aware of all contract provisions, including those for commissions. Planners also ensure that the hotels treat meeting clients fairly when not all rooms in the block are picked up and it is necessary to invoke attrition clauses.

This paper deals with the related issues and problems of hotel reservations, cancellations, no shows, holdovers, early departures, overbooking, oversales, upgrades, walks, and the associated non-performance penalties or compensation. Specifically, we concentrate on non-performance penalties related to late cancellations and no shows, early departures, and walks. Because of the growing importance of the meetings, incentives, conventions, and exhibitions market, special attention is paid to group reservations, group sales contracts, and attrition clauses which penalize meeting planners for not picking up the agreed upon number of blocked room nights. Comparisons are then made with the cruise, airline, and car rental industries. Comparative statistics show that overall, hotels have outperformed the airlines and car rental agencies, but not the cruise lines. We conclude with recommendations for greater efficiencies in managing non-performance penalties or compensation for the hotel industry.