The ‘Right Sized’ Room Blocks

Room Blocks: What are they, and why do I need one?

The time has come for you to secure accommodations for your out-of-town guests. Chances are, it’s your first time reserving a room block, and you have a few questions: What is a room block? Will my event require one? What is the difference between a courtesy block and a contracted block?

Reserving a room block is an essential step in ensuring your guests have a comfortable place to stay, and can ease their minds from the stresses of transportation and traveling in busy cities like Chicago. While the idea of a room block may be overwhelming, we’re here to reassure you that this process can be fairly simple!

Understanding Room Block Jargon

Before we get into our recommendations, let’s break down some important terms involved in securing a room block. After all, we know first hand that these words can leave your mind scrambled when you hear them for the first time!

Room Block: A room block is a specified number of guest rooms that your preferred hotel sets aside for your guests, at a guaranteed rate, and sometimes at a discounted group rate.

Attrition Rate: The attrition rate, in a contracted block, is the specified number of rooms that must be booked in order for you to avoid a financial penalty. For example, if your attrition rate is 90% of the contracted block of 10 rooms, and your guests only book 8 rooms, you are financially responsible for 1 room. Your attrition clause will outline your hotel’s exact penalty, and at times can be negotiated or may include a mitigation clause.

Shrinkage Clause: Contrary to an attrition rate, a shrinkage clause is a specific number of rooms that your hotel will allow to remain unused, before you are obligated to pay a penalty fee.

Mitigation or Re-sell Clause: If your contract includes a mitigation or re-sell clause, this means that your hotel will be required to attempt to sell your unused rooms to other customers, so that you may avoid attrition and being financially responsible. This is not always guaranteed and varies per hotel.

Cut-off Date: The cut-off date, typically 30-60 days before check-in, is the very last day that your guests are guaranteed accommodations within your room block and at the group rate. After this date, any unused rooms will be released back into the hotel’s inventory and will be made available for the general public to book.

Concessions: Depending on the hotel and selected block, your contracted room block may come with perks such as complimentary Wi-Fi, reduced parking rates, complimentary room upgrades, or even complimentary transportation for your guests if your event is off-site.

Courtesy Blocks vs. Contracted Blocks: Which one should I choose?

Courtesy Block: A courtesy block is a group of rooms, typically 10 or less, that your hotel sets aside without any financial obligation from you. Your guests will have the opportunity to secure their own rooms, at a guaranteed block rate, until a specified cut-off date. After this date, any remaining unused rooms on the courtesy block will be released, and your block terms and rate will no longer apply for guests that book accommodations at the hotel past that date. It’s important to note that some hotels will still require you to sign a contract to hold the rooms as a courtesy, but will not require a financial obligation.

Contracted Block: A contracted block is a group of rooms that your hotel pulls from their inventory, and guarantees for your guests. When signing for a contracted block you will likely have to agree to an attrition rate, meaning that you are financially responsible for a number of unused rooms if they are not booked by the cut-off date. A contracted block may also include other clauses, such as a shrinkage clause or mitigation clause, as defined above.

While it’s certainly possible to book a successful contracted block, a courtesy block is our recommendation for weddings and other social events, especially after the whirlwind of cancellations and postponements in 2020. Now, what if you’re in need of more than 10 rooms and your hotel requires a contract? Our suggested solution is to block 10 rooms per night under their courtesy and add a few extra rooms based on their availability once the block fills.

Aside from the simplicity of a courtesy block, we also view them as a safety net in the event of unpredictable circumstances. Whether your guests find an alternate accommodation or have to cancel their attendance in an emergency, you can find ease in knowing you are not financially responsible for unused rooms.