the May 2008 Issue in PDF Format - Trade Show Executive

Continued from page 21
M&A Issues
Merger and acquisition activity has
directly affected trade show organizers
and publications. In the First Quarter of
2008 alone, there were 202 transactions
announced totaling $13.4 billion in value,
across the 11 media and information
sectors tracked by The Jordan, Edmiston
Group, Inc. (JEGI). How those
companies integrate their trade show
businesses into smooth-running engines
can impact future shows.
Most organizations have non-compete
clauses in their venue contracts to prevent
competitive shows in close proximity or
timing. But these clauses could be at risk
if a merger creates a conflict after the
contract is signed. Trade show companies
involved in such transactions should
review existing contracts to head off
potential problems.
Trade show organizers also need to
pay attention to M&A activity among hotel
companies. A robust hotel market has
resulted in numerous sales and acquisitions.
The net result is that more hotels are
owned by private equity groups with little
experience in the hospitality field. As a
result, acquisitions might affect contracts
signed by show organizers years before the
merger. That’s one reason why changes of
ownership and/or management should be
addressed in the original contract, Schaffer
said. For instance:
• If a Marriott Hotel converts to a
Renaissance Hotel — also a Marriott
business brand — there may be no
significant impact for your group.
But if the conversion also brings
extensive renovations during your
event, it might be reasonable to ask
to relocate to another hotel owned or
managed by the same parent company
in markets where that’s possible,
Schaffer said. Thus, this contingency
should be addressed in the hotel
contract, requiring the hotel to inform
the group of extensive construction
or renovation, and the group must be
able to cancel or transfer if this activity
could jeopardize a successful event.
• If a hotel converts from a well-known
upscale brand to one of lower quality,
organizers may have reason to question
whether service levels will be adequate,
Schaffer said. By including minimum
service levels in the contract, an
inability to meet those requirements
might be enough to cancel the contract,
if this option is included in the
contract.
The caveat, Schaffer said, is that there
are no hard and fast rules governing
events resulting from M&A activity. “It’s
a challenge to anticipate and deal with
industry changes,” he said.
Reach Henry Schaffer at (312)
840-7673 or hschaffer@jenner.com
Can Attendees Be Held Liable for Organizer’s Unpaid Balance?
A Look at What Happened at the Westin Casuarina Hotel in Las Vegas
By Sandi Cain, News Editor
Attendees of a small dental
conference in Las Vegas last fall got
a post-conference surprise: a bill for
their ‘share’ of the organizer’s unpaid
balance of $57,000 owed to the Westin
Casuarina Las Vegas Hotel, Casino & Spa.
The hotel billed attendee’s credit cards
for approximately $665 each after the
organizer failed to pay the bill for food
and beverage and other services related
to the conference. The event, Dental Boot
Kamp, was organized by The Coaching
Center of Austin, TX and held October
5-6. The organizer said in news reports
that she was working on a payment plan.
Henry Schaffer, an attorney who
specializes in the meeting and trade show
industry, expressed surprise at the hotel’s
action. “Contracts generally hold the event
organizer responsible,” Schaffer said.
However, the 815-room Westin
Casuarina hotel said its registration folio
has a clause that reads: “I agree that my
bill liability for this bill is not waived and
agree to be held personally liable in the
event that the indicated person, company,
or third party fails to pay for any part or
all of these charges.”
A hotel guest might presume that
clause refers to charges related to a given
guest room. In this case, the hotel was
using it as the basis to recoup other
charges as well.
IAEE President Steven Hacker called
the action a total aberration. “Unless
there is a contractual relationship between
the attendees and the organizer, the
failure of an organization to meet its
financial obligations does not give the
hotel the right to bill those obligations to
attendees,” he said.
Westin Later Rescinds Action
On April 10, the Westin reversed its
decision and said it would refund any
charges made to the attendees’ credit
cards to recoup the unpaid bills. In a
letter to attendees, Amy Ashton Shaw,
assistant corporate general counsel for
Columbia-Sussex, owner of the Westin
Causarina and 67 other U.S. hotels, said
the decision to refund the charges is
an “effort to show our good faith” but
recognizes that the organizer “is truly at
fault for the expenses incurred by all the
parties.” Columbia Sussex spokesman
Hud Englehart said, “We’ve decided as
a matter of customer relations to issue
the refunds while continuing to pursue
payment from The Coaching Center.”
“I think it will be interesting to hear
other hotels’ perceptions about this
business decision made by the Westin
Casuarina,” she said Tyra Hilliard, an
Arlington, VA-based consultant on legal
and risk management issues for the
meetings industry. “Their attitudes will
probably be the most significant indicator
of whether this will be an ongoing
contract issue.”
Schaffer said the moral to the story is
that people should read what they sign —
even at hotel check-in.
Reach Henry Schaffer at (312)
840-7673 or hschaffer@jenner.com;
Steven Hacker at (972) 458-8002 or
shacker@iaee.com; Tyra Hilliard at
(202)640-1843 or tyra.hilliard@gmail.com;
Amy Ashton Shaw and Hud Englehart at
(859) 578-1100.
22 May 2008 Trade Show Executive www.TradeShowExecutive.com