What Event Organizers Need to Know About Coronavirus and Canceling Contracts

February 12, 2020

Lisa Sommer Devlin, owner of Phoenix-based Devlin Law Firm which specializes in hospitality law, has received about a dozen phone calls from hotels in the past week. They’re reaching out to her as a result of groups wanting to cancel events without penalties, due to the coronavirus. 

While the virus outbreak has been a hot news topic for the past few weeks — and is having an impact on events around the world, especially in Asian markets — there are some misperceptions in the industry regarding the legal perspective around cancellations. 

Devlin spells out what you need to know: 

First, look at your contract and see exactly what it says. Your force majeure or impossibility clause will define when you can or can’t cancel, says Devlin.

Second, recall what force majeure actually means. There are two legal elements to claiming force majeure: The first is that something unforeseeable happens, and the second is that it makes it impossible to execute your event.

“Planners tend to look at the new event — in this case, the coronavirus — and think a terrible and unforeseeable event has happened. But that’s not true, unless you can also show that it is making your event impossible,” says Devlin. At this point, in the U.S., it’s going to be very difficult for planners to show that the coronavirus outbreak is truly making their event impossible to hold, she adds.

One reason for this: There are virus outbreaks all the time, and they rarely prevent events from happening. For example, the CDC reports that more than 34,000 people died from the flu last year in the U.S. alone — “and yet no one would ever think to cancel their event because of a flu epidemic,” Devlin says. Five years ago, she adds, she was having the same conversations about zika; now, zika hasn’t disappeared, but people aren’t really worrying about it anymore.

The exception to this, from a legal perspective, is a situation where, say, 95 percent of your event delegation is coming from China, and due to flight cancellations, they literally cannot get to your event. This situation might rise to the level of force majeure, says Devlin — but in general, U.S. planners will have a very difficult time proving they have a right to cancel a contract due to coronavirus.

So where does attrition come in? For groups with contracted hotel blocks, the attrition clause is designed to address the financial risk if fewer people register (or attend) than planned. Typically, the hotel takes a hit on the first 20 percent of people who don’t show up and the group absorbs the difference, says Devlin. The problem is, people can’t come to an event for a million different reasons, so you’ll have your work cut out for you trying to prove that coronavirus is the main factor.

“If you could go to a hotel partner and prove that you’re in attrition because [attendees were supposed to be] coming from China and can’t get there, then they might be willing to work with you — but they’re not obligated to under the law,” says Devlin.

At the end of the day, it’s the language in your contract that matters, so review it closely, says Devlin. Also, take the news with a grain of salt when you are assessing whether the coronavirus outbreak has a real chance of making a major impact on your event.

Yes, people are dying, and that’s tragic, says Devlin; but it’s important to look at the statistics critically. For example, there have been just over 1,000 reported deaths from coronavirus worldwide, according to CNN (as of Feb. 11), but that makes up just over 2 percent of the 43,000 people who have been infected. More information is needed about who’s getting sick, who’s dying and exactly how the virus is being spread.

“People are getting so hysterical, but maybe it’s not really that necessary,” she adds. “These things happen every few years, and sometimes it’s just reacting to the news rather than actual risks.”

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Partner Voices
Less than six months ago, Lisa Messina joined the Las Vegas Convention and Visitors Authority (LVCVA) as the first-ever chief sales officer after leading the sales team at Caesars Entertainment. A 12-year Las Vegas resident, Messina is a graduate of Cornell University’s School of Hotel Administration and serves on MPI International’s board of directors. TSNN had a chance to catch up with this dynamic leader and talk to her about her vision for the new role, current shifts in the trade show industry, creating more diversity and equity within the organization, and advice to future female leaders. Lisa Messina, Chief Sales Officer, LVCVA With Las Vegas becoming The Greatest Arena on EarthTM, what are some of the things you’re most excited about in your role? Our team was at The Big Game’s handoff ceremony earlier this month, and I couldn’t help but think, “We’re going to crush it next year!”  These high-profile events and venues not only drive excitement, but also provide unmatched opportunities for event planners. Allegiant Stadium hosts events from 10 to 65,000 people and offers on-field experiences. Formula 1 Grand Prix will take place in Las Vegas in November, after the year-one F1 race, the four-story paddock building will be available for buyouts and will also offer daily ride-along experiences that will be available for groups. And, of course, the MSG Sphere officially announced that it will open in September, ahead of schedule, with a U2 residency. It’s going to be the most technologically advanced venue as far as lighting, sound, feel, and even scent, and it will be available for buyouts and next-level sponsorships inside and outside. There’s no ceiling to what you can do when you’re doing events in Las Vegas.  Allegiant Stadium As the trade show and convention business returns to the pre-pandemic levels, what shifts are you noticing and how do you think they will impact the industry going forward? Our trade show organizers are very focused on driving customer experience. Most of our organizers are reporting stronger exhibitor numbers and increased numbers of new exhibitors, with trade shows proving to be almost or above 2019 levels. Now our organizers are really doubling down on driving attendance and focusing on the data to provide that individualized, customized experience to help attendees meet their goals and get the best value. Some companies continue to be cautiously optimistic with their organizational spend when it comes to sending attendees, but I think it will continue to improve. As the U.S. Travel Association makes more progress on the U.S. visa situation, we also expect a growing influx of international attendees. What are some innovative ways the LVCVA helps trade show and convention organizers deliver the most value for their events? We focus on customer experience in the same way that trade show organizers are thinking about it. We got rave reviews with the West Hall Expansion of the Las Vegas Convention Center (LVCC), so over the next two years, we will be renovating the North and the Central halls, which will include not just the same look and feel, but also the digital experiences that can be leveraged for branding and sponsorship opportunities.  Vegas Loop, the underground transportation system designed by The Boring Company, is also a way we have enhanced the customer experience. Vegas Loop at the LVCC has transported more than 900,000 convention attendees across the campus since its 2021 launch. Last summer, Resorts World and The Boring Company opened the first resort stop at the Resorts World Las Vegas , with plans to expand throughout the resort corridor, including downtown Las Vegas, Allegiant Stadium and Harry Reid International Airport. The LVCVA also purchased the Las Vegas Monorail in 2020, the 3.9-mile-long elevated transportation system that connects eight resorts directly to the convention center campus. This is the only rail system in the world that integrates fares directly into show badges and registration. For trade show organizers, these transportation options mean saving time, money and effort when it comes to moving groups from the hotels to LVCC and around the city. Also, the more we can focus on building the infrastructure around the convention center, the more it supports the customer experience and ultimately supports our trade show organizers. Scheduled to debut in Q4, Fontainebleau Las Vegas will offer 3,700 hotel rooms and 550,000 square feet of meeting and convention space next to LVCC.  What are some of the plans for advancing DEI (diversity, equity and inclusion) within your organization? We’re currently partnering with instead of working with a leading consulting firm, to lay the foundation and create a solid DEI plan and be the leader when it comes to DEI initiatives. The heart of that journey with the consulting firm is also talking to our customers about their strategic approaches to DEI and driving innovation in this space.  What are your favorite ways to recharge? My husband and I have an RV and we’re outdoorsy people. So, while we have over 150,000 world-class hotel rooms and renowned restaurants right outside our doorstep, one of my favorite things to do is get out to Red Rock Canyon, the Valley of Fire, and Lake Mead. Five of the top national parks are within a three-hour drive from Las Vegas, so there’s a lot you can do. We love balancing the energy of Las Vegas with nature, and we’re noticing that a lot of attendees add activities off the Strip when they come here.  Valley of Fire What advice would you give to women following leadership paths in destination marketing? I think it’s about being laser-focused on what you want to accomplish; building a team around you that lifts you and helps you achieve your goals; and being humble and realizing that you do it as a group. No one gets this done alone. Thankfully, there are a lot of women in leadership in this organization, in our customers’ organizations, and in this city that we can be really proud of. We’re a formidable force that is making things happen.   This interview has been edited and condensed. This article is exclusively sponsored by the Las Vegas Convention & Visitors Authority. For more information, visit HERE.