A hotel room block is a reservation of multiple rooms set aside by a hotel for a specific group attending an event, such as a wedding or conference. This arrangement typically secures a negotiated, discounted rate for the attendees and ensures room availability during peak dates. Confusion often arises regarding who is financially responsible for securing these rooms, leading to a common question about whether the event organizer must pay for the entire block. The answer depends entirely on the specific contractual agreement established between the organizer and the hotel.
Block Types and Financial Commitment
The decision of whether an organizer must pay is determined by choosing one of the two primary models for a room block: the courtesy block or the guaranteed block. The courtesy block, sometimes called a soft hold, involves no financial commitment from the organizer. The hotel agrees to hold a set number of rooms until a specific cutoff date, usually 30 days before the event, without requiring a deposit or a signed commitment to pay for unused rooms.
This type of block is ideal for events with unpredictable attendance, such as weddings, because any rooms not booked by the cutoff date are simply released back into the hotel’s general inventory at no cost to the organizer. While risk-free, the courtesy model offers fewer guarantees; the hotel may limit the number of rooms in the block or reduce the size if their inventory sells quickly.
The guaranteed block is a legally binding contract where the organizer commits to paying for a minimum number of room nights regardless of whether guests book them. Because the hotel guarantees availability and often provides a deeper discount, they require the organizer to absorb the financial risk of low attendance. This commitment dictates the organizer’s initial financial exposure and requires careful forecasting of guest needs.
Organizer Liability: Attrition and Deposits
The primary financial risk for an organizer who chooses a guaranteed block is defined by the attrition clause within the contract. Attrition refers to the penalty incurred when the group fails to meet the contracted minimum room night usage, which hotels typically set between 70% and 90% of the total block. If the actual number of rooms booked by guests falls below this threshold, the organizer is liable for the difference, paying the hotel for the lost revenue on the unbooked rooms.
For example, if an organizer contracts for 100 room nights with an 80% attrition clause, they are responsible for ensuring 80 room nights are booked. If guests only book 65 room nights, the organizer is charged for the remaining 15 room nights that fell short of the minimum commitment. The calculation of this penalty can vary, with some contracts calculating the shortfall per night, while others use a cumulative total across the entire event.
Hotels often require an upfront deposit to secure a guaranteed block. This deposit reserves the inventory and is typically applied toward the final cost of the rooms or refunded if the group meets its minimum room night commitment. The organizer’s liability for attrition fully crystallizes after the contract’s cutoff date, at which point the hotel calculates the final room pickup and determines any penalty payment due.
How Guests Handle Room Payments
The organizer’s liability for attrition penalties is distinct from the payment for the rooms that are actually occupied by attendees. In the vast majority of room block arrangements, guests use a dedicated code or booking link to reserve a room within the block at the negotiated group rate. This standard procedure is known as “Individual Pay,” meaning the guest is financially responsible for the room rate, taxes, and any incidentals they incur upon check-in or check-out.
The purpose of the block is to secure the rate and the inventory, not to transfer the cost of the occupied rooms from the guest to the organizer. Guests receive a discounted rate, which can range from 5% to 20% off the standard rate, as a benefit of being associated with the group. The organizer’s payment obligation only kicks in for the unbooked rooms in a guaranteed block, not for the rooms that are used by attendees.
A rare exception to the individual pay model is the “Master Bill” arrangement, where the organizer explicitly agrees to cover all or a portion of the room charges. This is typically reserved for corporate events or conferences where the company covers employee lodging costs.