Types of Group Contracts

Rows of chairs in empty auditorium

Contract Terminology

Before delving into the types of group contracts, it is important to understand the difference between "number of rooms" and "total room nights" in a contract. This is an important distinction as contract performance is determined by the number of room nights, not the number of rooms. Therefore if all guests do not stay for all nights, it will affect attrition as explained below.

Rooms vs. Room Nights

     Rooms = the actual number of rooms you need

     Room nights = the number of rooms x the number of nights

For example, if you need 50 rooms for 3 nights, the total number of room nights is 150.
 

LRA vs. NLRA

Another important distinction on group hotel contracts is LRA and NLRA.

  • LRA means Last Room Availability - On a group hotel contract with a fixed rate, this means that all rooms must be sold to you at the fixed negotiated contracted rate, down to the very last room. If the hotel has any occupancy, your rate must apply.
  • NLRA means Non-Last Room Availability - This means that the fixed negotiated contract rate is available to you at the property's discretion. During periods of high occupancy when there are few rooms left, the property can block your contracted rate and charge a higher rate to maximize revenue.
     

Group Room Blocks

There are two types of group room block contracts.  One is a Contracted Block and the second is a Courtesy Block. The essential difference is that the University is not responsible for unused rooms in a Courtesy Block.  In a Contract Block, the University will be held financially responsible for unused rooms.
 

A Contracted Block is for a specified number of rooms at a guaranteed rate. Your group will be required to utilize the number of rooms under contract, minus a percentage called "attrition slippage." For example, if you contract for 50 rooms over a two-night period and your contract permits 20% attrition, you would be responsible for booking a minimum of 80 room nights (100 room nights - 20% attrition) by the cutoff date. If you do not fulfill that requirement, you will be charged for the number of unbooked rooms up to the minimum of room nights (80 in this example). Therefore, if you only booked 35 rooms, you would have to pay for 5 rooms x 2 nights (10 room nights) to get you to the 40 rooms or 80 room nights required.

Contracted Blocks typically:

  • Come with beneficial concessions such as complimentary meeting space, free parking, free breakfast, or waiver of resort fees.
  • Offer lower rates than you would get from a Courtesy Block.
  • Are mandatory for large groups and groups that require meeting or event space.
  • Are required in high-volume period and over dates when there are events in town. 

A Courtesy Block is a block of rooms held for your group with a cutoff date (usually 30 days prior to check-in). At the cutoff date, the hotel will release any unbooked rooms in your block back into their inventory without financial obligation to the University. Courtesy Blocks are typically used for smaller groups and not all hotels offer them.

Courtesy Blocks:

  • Are generally the best options when guests are paying for themselves.
  • Often have a booking link, allowing guests to book themselves and pay when they arrive.   
  • Are rarely offered for large groups or over high-volume dates.
  • Allow guests to book until the cutoff date when the inventory is released, and the University is not responsible for unused rooms.
  • Generally require a signed agreement with the University department to reserve the rooms even if the University if not paying for the rooms.
       

Group Air

Group Air contracts are highly beneficial to the University for outgoing travel such as course travel, internships, and other programs abroad. Among other benefits, Group Air contracts do not require the names of participants in order to book, which allows us to hold space before trip participants are determined.  Groups of 10 or more traveling to the same destination qualify for a group air, which offers the following advantages:

  • The ability to hold airline seats without travelers’ names
  • The ability to drop a number of seats without penalty
  • Waiver of group deposits (for certain airlines)
  • Name changes on unused tickets
  • Waived or reduced name change fees and utilization penalties
  • Pricing negotiation or fare matching on group air tickets


For assistance with group room blocks or to book group air, contact World Travel at [email protected]