The question
What is attrition in a hotel contract and why does it matter?
Attrition is a contractual commitment to fill a percentage of your room block — usually 80–90%. Fall short and you pay for the empty rooms. Negotiating the percentage, the review date, and the resell credit is where the money is.
How the math actually works
You block 100 rooms at 85% attrition. Thirty people drop out and you fill 70. You owe the room rate on the 15-room gap between your 85-room commitment and your 70 actual — often plus taxes and service charges.
On a $520 nightly rate across three nights, that is roughly $23,400 for rooms nobody slept in.
The four terms to negotiate every time
Rates get the attention. These terms decide your actual exposure.
- Attrition percentage: push from 90% to 80%, or lower for first-time programs.
- Cumulative vs. nightly review: cumulative across the full block is far safer than per-night measurement.
- Resell credit: if the hotel resells your released rooms, you should get credit. This is standard and frequently omitted.
- Block review dates: build two checkpoints (120 and 60 days out) to release unsold rooms penalty-free.
Sizing the block honestly
Most attrition penalties are self-inflicted through optimistic blocks. If last year's retreat drew 78 people, block for 78, not for the 110 you invited. Adding rooms later at the contracted rate is usually easy; removing them is not.
Key takeaways
- Attrition, not rate, is where group contracts hurt.
- Insist on cumulative review and resell credit.
- Block to realistic attendance, then add rooms as demand appears.