Lives on Loan:
The Importance of Christian Stewardship
What is attrition, and why is it a threat to the annual Free Will Baptist convention?
Yes, Virginia, There IS an Attrition Clause
by Keith Burden
The duties of the executive secretary are outlined in the Free Will Baptist Treatise. The following appears under the heading Arranging Annual Convention: “He shall expedite the planning of the national convention program, enroll all ministers and delegates, print and distribute minutes, and investigate future sites for the annual sessions.”
The responsibility for arranging the annual convention has evolved into a formidable task. The Executive Office handles a mountain of details during the year leading up to this annual event. One major component of planning is arranging hotel accommodations for attendees. Over the years, the number of rooms we reserve has increased significantly.
In advance of the convention, we negotiate “blocks” of hotel rooms. The number is based on previous years, and for a number of years we have been able to project housing needs with a relatively high degree of accuracy.
In order for hotels to hold rooms for us, we are required to sign a legally binding contract that contains specific language detailing responsibilities and duties of both the hotel and the convention. One section of the contract is called the attrition clause and contains “wording that outlines potential damages or fees a party may be required to pay if it does not fulfill minimum commitments in the contract.”
How Does an Attrition Clause Work?
Let’s say the convention reserves 100 rooms in a hotel. In order to protect itself from financial loss, that hotel’s attrition clause requires the convention to fill 80 of the 100 rooms blocked. If we fail to meet the contractual requirement, the hotel reserves the right to bill us for any unoccupied room under 80%.
Historically, the convention has met this requirement, at least until recently. Over the last two years we have paid attrition fees of more than $36,000. Why? While a number of factors may contribute to the problem, the main reasons appear to be:
A bad economy. Many convention attendees opt for more affordable hotels outside the room block. Room rates at downtown hotels, although not exorbitant, have resulted in sluggish sales.
Frustration over the reservation process. On the day housing opens, hotels are slammed, and some people have a difficult time securing a room. Consequently, conventioneers resort to overbooking rooms initially and later cancel the ones they do not need. Those cancelled rooms usually remain unsold. Other attendees decide to avoid the hassle altogether and book rooms outside the block. Either way, at the end of the day we end up paying for empty rooms. While this may sound like an oversimplification, this is the challenge we face.
What Is the Remedy?
Obviously, no solution is guaranteed; however, we are taking strategic steps to address these challenges. These steps include:
Negotiating lower attrition clauses. Although it is difficult to convince a hotel where we already have a contract to lower the attrition penalty, we have had some success negotiating lower percentages in future sites.
Downsizing room blocks. Under normal circumstances, liability is reduced when we have a smaller room block. If attendees continue to book rooms in outlying, limited-service properties, we will be forced to reserve fewer full-service hotel rooms in the downtown area.This will make it more challenging to find a hotel room near the convention center.
Changing the opening date for housing. A significant number of states hold their Bible and Music and Arts competition after the first Monday of April. Therefore, this year housing will not open until Monday, May 9, at 9:00 a.m. (CST). This should allow those attending the convention to know exactly how many rooms they need before they make reservations. Hopefully, this will reduce the number of cancellations.
Why Is the Housing Block So Important?
While we understand the reasons for staying in less expensive, outlying hotels, let me explain why using rooms in the hotel block is important to the convention:
Convention center costs. Revenue generated by convention hotels (usually located in close proximity to the convention center) helps drive the city’s local economy. Consequently, some cities discount the rental cost of their convention facilities IF a significant number of downtown hotel rooms are occupied. This ultimately saves the convention money.
Meeting space. Often, hotels provide complimentary meeting space (i.e. ballrooms) when we meet attrition requirements. As a result, rented meeting space in the convention center can be reduced. This saves the convention money.
Stewardship. We are committed to planning a cost-effective meeting while creating a high quality convention experience for Free Will Baptists. Steps are being taken to cut costs and streamline the program for maximum results at minimal expense. Paying thousands of dollars for empty hotel rooms is not good stewardship.
Thank you for reading this article, considering the issues addressed, and doing your part to help. Join me in praying for a great convention in Charlotte, North Carolina.
About the Writer: Keith Burden is executive secretary of the National Association of Free Will Baptists. To learn more about the convention, visit www.nafwb.org.