What is an attrition clause?
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An attrition clause caps the group's financial liability when a room block underperforms. It sets an allowance — typically 10 to 20 percent — for unsold rooms; anything below the allowance triggers an attrition fee usually calculated on lost room revenue.
Why it matters
Risk protection
Protects the property from carrying unsold inventory the group originally contracted for, without overpenalising honest under-pickup.
Negotiated allowance
The allowance percentage is a deal-by-deal negotiation; larger or repeat groups secure higher allowances.
Tracked in pickup pace
Sales tracks pickup against the contracted block in real time so the group can release inventory before the cut-off date and avoid attrition fees.
Frequently Asked Questions
How is an attrition fee calculated?
Most clauses charge the contracted group rate for each room below the attrition allowance. A 100-room block at $200 with 15% attrition that picks up 80 rooms owes 5 rooms × $200 = $1,000.
Are attrition fees negotiable?
Yes. Frequently the allowance percentage, the rate used for the calculation, and whether ancillary revenue (F&B, AV) offsets the fee are all negotiable. Large or strategic groups secure better terms.
What's the difference between attrition and cancellation?
Attrition covers shortfall on a partially-picked-up block. Cancellation covers the entire block being cancelled. Cancellation penalties are typically much steeper and time-banded.
Related Terms
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