Cancellation Clause

The section of a hotel contract that defines what the group owes if it cancels the entire event, and by when. Cancellation penalties usually escalate on a sliding scale tied to how close to arrival the cancellation happens — for example, 50% of anticipated room revenue if you cancel 90 days out, rising toward 100% inside 30 days. Unlike attrition, which penalizes unused rooms within a program that still happens, cancellation applies when the whole block goes away. Read this clause alongside the cutoff date and any force majeure language, because together they determine your total exposure if plans change. Negotiating a graduated schedule, and credit for rooms the hotel resells, is one of the highest-value moves in any room block contract.