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By Toby Brenner
For USAE News, July 2005
For event organizers and hotels, attrition and attrition fees are one of the most significant problems in the meetings, conventions and exhibitions industry.
Attrition fees create undue stress on the relationship between event organizers and hotels. They also create direct financial hardships for both parties.
According to a survey report by the Convention Industry Council (CIC), the percentage of those who have been assessed attrition fees rose dramatically to 32 percent in 2002/2003 from just over four percent in 1998. In 2003, 32% were assessed fees and 41% of groups with a multiple hotel block were assessed fees. Only 52 percent of respondents have a formal organizational policy to cope with attrition, according to the study.
While research shows that attrition fees and damages are an escalating problem, there is a way to help remedy the situation.
Attrition Solutions
Following the events of 9/11, Los-Angeles-based Par Avion, one of the world's leading conference housing and travel companies, had a number of clients that needed to postpone or cancel events. Par Avion was able to step in and facilitate the brokering of some of its client’s room liabilities. In the end, Par Avion recognized that there was a market for the distribution of these attrition liabilities. As a result, Par Avion partnered with Active International, the world's largest corporate trading company, to present a new program called Attrition Solutions.
The program offers many benefits to the hotel and the event organizer or association. The hotel benefits by: Potentially collecting 100 percent of the liability upfront; avoiding steep litigation expenses; and maintaining client goodwill. The event organizer or association benefits by: Significantly reducing or eliminating attrition fees; satisfying contractual obligations with the hotel; and maintaining goodwill with the hotel partner.
With Par Avion’s experience and Active International’s unique trading abilities, the program can provide an answer to a high-profile problem within the conference and travel industry.
According to David Korse, president and CEO of IDG World Expo, Attrition Solutions is an important new opportunity for the industry. “As an experienced event organizer of conferences and exhibitions for technology markets, we believe we have a strong business understanding of the attrition issue. A program like this has the potential to provide an important sense of security and reduced financial risk.”
Scott Welker, chief operating officer of the Specialty Coffee Association of America (SCAA), wishes this program had existed a few years ago. “It would have saved us quite a bit of money when our association had to pay attrition fees.”
To inquire about the Attrition Solutions program, call Par Avion at 800-826-5977 or e-mail attrition@paravion-inc.com. Visit www.paravion-inc.com.
Toby Brenner is president and CEO of Par Avion Meetings and Conventions.
E-mail her at tobyb@paravion-inc.com.
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