Three Numbers Decide the Bill
A group block contract turns on three numbers. Block size sets the rooms the hotel holds for the group. The cut-off date sets the day the hotel takes back whatever the group has not booked. The attrition threshold sets how far pickup can fall before a fee applies.
Read those three numbers before the rate.
What the Block Commits
Mews defines hotel attrition as a contractual obligation that may require a group client to pay a fee when actual room use falls below the minimum agreed in the contract. The hotel holds inventory for the group and declines other bookings for those dates.
Cvent defines attrition as the charge an event organizer pays when rooms in the contracted block are left vacant at the end of the booking period. The block also carries spending forecasts. Mews notes that food and beverage, banquet staffing and event setup all follow the anticipated group size.
How the Attrition Fee Is Calculated
Mews publishes the formula. Attrition fee equals contracted room nights multiplied by the attrition threshold percentage, minus actual rooms picked up, multiplied by the contracted nightly room rate and the fee percentage.
Run it with the numbers Mews uses. A group contracts 200 room nights at an 80 percent threshold and picks up 140. The threshold requires 160 room nights. The shortfall is 20 room nights. At a contracted rate of 150 dollars per night and a 90 percent fee, the attrition charge is 2,700 dollars. That is 20 room nights times 150 dollars times 0.90.
Substitute your own block size and rate. The formula returns the fee.
Where the Threshold Sits
Mews uses an 80 percent threshold in its worked example. That figure allows the group to release 20 percent of contracted rooms without penalty. The threshold for a contract depends on the group booking history, the event type, demand for those dates and the flexibility the hotel can absorb.
Four Clause Structures
Mews lists four attrition structures plus a food and beverage variant. A revenue-based clause measures total contracted room revenue against the revenue achieved. A cumulative clause measures total pickup across all event nights. A per-night clause measures pickup on each night. A tiered clause scales the fee in brackets by the size of the shortfall.
The clause structure decides how an uneven week is charged. A cumulative clause measures the event as a whole. A per-night clause measures each night on its own.
Ask which structure your contract uses.
What the Cut-Off Date Does
Cvent describes the cut-off date as the point at which the hotel takes back unsold rooms with enough time left to resell them. Rooms released early return to general inventory, and planner exposure shrinks with them.
Cvent advises monitoring pickup pace through the booking window. Movement in the pace lets a planner raise or cut the block before the cut-off arrives. Canary Technologies names pickup monitoring as the planner side control on attrition.
Sample clause language on Law Insider shows how a resale credit works. One published clause charges the difference between 85 percent of a minimum guest room revenue figure and the actual guest room revenue, less the revenue from rooms the hotel resells at 80 percent of the group average room rate. Law Insider draws these samples from real agreements. Brand terms vary by property and market.
Compare the Rate With the Terms
Compare block size, threshold, clause structure, cut-off date, deposit schedule and cancellation window alongside the nightly rate.
The threshold sets the forgivable shortfall. A group block of 200 room nights at a 75 percent threshold forgives 50 room nights. The same block at a 90 percent threshold forgives 20. Price the threshold before the room.
Ask Before You Sign
Get written answers to a short list. What is the attrition threshold? Which clause structure applies? What is the cut-off date, and can it move? Does the hotel credit resold rooms against the shortfall? What is the deposit schedule? Can the block be reduced, and by what date?
Mews reports that the allowable shortfall, the calculation method, the fee structure and the deadlines for reducing the block all sit on the table. Canary Technologies recommends regular pickup reviews with the hotel contact through the booking window. Early reviews give both sides room to adjust the block before fees land.
Attrition, cut-off, deposit and cancellation rules differ between agreements. This material is commercial guidance. It is not legal advice.
Three numbers and a cut-off date set the fee. Get them in writing before signature.