纽约广场饭店将关闭四年：会议策划者如何应对酒店违约与翻新风险？

Skift Take

The Plaza won’t be the last hotel to close with events on the books. For planners booking years in advance, the closure is a reminder to review what their contracts say happens next.

The Plaza Hotel has hosted some of New York City’s most celebrated gatherings for more than a century. Now, the 119-year-old property, operated by Fairmont Hotels & Resorts, will close in January 2027 to restore its landmark-protected facade. The shutdown is expected to last at least until 2031 and will affect its 282 guest rooms, restaurants, and event spaces, including the Grand Ballroom.

For meeting planners, the situation exposes an easy-to-overlook contractual vulnerability: What happens when the venue, not the client, cancels? 

When the Hotel Cancels

Hotel contracts typically spell out what happens when an organizer cancels, including substantial penalties tied to guest rooms, food and beverage, and meeting space. But protections when the hotel cancels are often less explicit.

Joshua L. Grimes, an attorney specializing in meetings and events contracts and president of Grimes Law Offices, LLC, said both parties generally have similar legal obligations.

“Either party to an event contract is able to cancel. But if the cancellation occurs because a party changes its mind about holding the event, or a party defaults causing cancellation, the other (aggrieved) party is entitled to damages,” Grimes said.

When an organizer cancels, a hotel’s damages generally involve lost profits from contracted rooms and food and beverage. If a hotel cancels, the organizer may be entitled to recover additional relocation costs including higher costs for rooms, food and beverage, and rescheduling fees imposed by vendors, according to Grimes.

Returning deposits generally isn’t sufficient, Grimes said.

“The organizer is legally entitled to recovery of its losses,” he said. “This may include costs to find a substitute venue, cancellation and/or rescheduling costs for vendors, and any additional fees charged by the new venue and suppliers.”

Even when a contract doesn’t specifically address damages, organizers may have legal grounds to recover their losses, depending on the circumstances.

The Clause Hotels Don’t Always Offer

Elizabeth Caragay Watts-Russell, CEO of SiteSelectionStrategist, said the most important protection rarely appears in a hotel’s initial contract.

“You will seldom find this clause in a hotel’s first contract draft. You have to add it and insist on it,” she said, referring to a cancellation-by-hotel provision.

Her preferred language prevents a hotel from canceling a signed agreement to take on more profitable business. It also requires the property to help secure a comparable replacement venue and cover reasonable additional costs, except in force majeure circumstances.

If the organizer cannot find a suitable replacement, the clause requires a refund of deposits and liquidated damages equal to what the organizer would have owed had it canceled.

Watts-Russell believes these provisions can influence which groups hotels choose to displace when competing business demands arise.

“If a hotel needs to cancel a program on specific dates, it will likely examine which group contracts contain this protection and which do not,” she said.

Watts-Russell said she recently encountered a hotel that removed her cancellation-by-hotel clause from a revised contract draft without explanation. She restored the language and insisted that it remain.

In another negotiation, a hotel initially sought to limit its responsibility to securing comparable space and covering increases in room rates and meeting space rental. After further negotiations, it accepted her broader protections.

When a hotel cancels a program, organizers may have to change dates, split accommodations among several hotels, modify their programs, or cancel altogether.

The financial consequences can extend beyond higher venue costs. Grimes said organizers may also recover vendor rescheduling fees and other expenses directly resulting from the cancellation.

What Planners Should Negotiate Before Signing

Grimes said one of the most common mistakes planners make is failing to negotiate an adequate cancellation-by-hotel clause.

He recommends requiring the hotel to pay a predetermined liquidated damages amount if it cancels for its own convenience or because of a default. Alternatively, contracts should allow organizers to recover losses associated with relocating an event, including higher venue costs, site visits, and vendor rescheduling fees.

Renovation clauses are another important protection.

Grimes recommends requiring hotels to notify organizers promptly once the general manager becomes aware of planned renovations, with a financial penalty for failing to provide timely notice.

“In practice, without some financial incentive or disincentive, many hotels fail to inform a group of renovations until shortly before they begin,” he said.

Watts-Russell’s renovation clause requires written notification detailing the project’s scope, timeline, anticipated impact, and the hotel’s plan to minimize disruption.

If renovations materially interfere with the event, her language allows the organizer to terminate without penalty and recover deposits and advance payments.

But Grimes cautions that simply allowing organizers to cancel and recover deposits isn’t enough. Contracts should also address additional relocation expenses.

It’s an important reminder that while meeting planners routinely negotiate cancellation penalties to protect hotels from lost business, they may not have equally strong protections when the roles are reversed.