By Barbara Dunn
Attrition, cancellation and force majeure clauses often receive the most attention in hotel contract negotiations. But billing and payment terms — especially those involving master accounts, deposits, credit approval, disputed charges, interest and collection costs — can carry significant financial risk for groups.
Meeting professionals should not assume these provisions are “standard.” Hotel credit and payment practices are changing, and groups should review these clauses carefully before signing. One key principle is worth keeping in mind:
It is easier to resolve a money dispute when the group is holding the money than when the hotel is holding it.
Groups accustomed to establishing a master account with a hotel should be aware that hotels have changed their credit application and approval processes. In some cases, groups that previously received credit approval have later been denied credit or granted only a limited amount — not because of the group’s credit status, but due to changes in the hotel’s credit policies.
A key issue is whether the hotel is using objective standards of creditworthiness when evaluating a group’s application. To reduce uncertainty, groups may want to apply for credit before the contract is signed and, if approved, include the approved amount in the contract as a minimum.
The contract can also allow the hotel to conduct a credit review before the meeting, while ensuring the group retains the specified credit amount unless there has been a significant change in creditworthiness based on objective standards, such as:
This approach provides greater certainty and helps avoid last-minute credit denial or unexpected prepayment demands.
Hotel contracts often require deposits, including an initial deposit. If the group expects to receive credit and establish a master account, deposit obligations should be kept as limited as possible.
If additional deposits are required — including up to 100% of the estimated master account — the contract should clearly state these are due only if credit is not approved.
Meeting professionals should also watch for provisions requiring prepayment of not only the estimated master account, but also a contingency deposit of up to 20% of the estimated balance. If credit has been established, this type of deposit should not be required. As an alternative, the group may offer a credit card for approved contingency charges.
Groups should also be cautious of language stating that failure to make a deposit payment when due may be treated as a cancellation, triggering cancellation damages. If included, the contract should require the hotel to provide written notice of the missed payment and allow a reasonable opportunity to cure before penalties apply.
Groups should ensure that the master account invoice is not due until all supporting documentation is received, including post-event reports and charge backups.
The contract should also provide a reasonable opportunity to review and dispute charges. Be wary of language limiting the timeframe to dispute charges and stating that failure to act within that period waives the right to dispute.
If charges are disputed, the group should:
This protects both parties by ensuring timely payment while preserving the group’s right to challenge inaccuracies.
Hotel contracts often allow interest or finance charges on overdue balances. These should apply only to undisputed amounts that are actually past due.
The same principle applies to attorney fees and collection costs. Contracts often require reimbursement for these expenses, but the language should be limited to unpaid, undisputed amounts — not charges that have been properly disputed.
Meeting professionals should pay close attention to billing, payment, credit and master account terms in hotel contracts. These provisions are evolving, often shifting more financial risk to groups.
To avoid problematic language, groups should carefully review provisions addressing:
Careful negotiation of these terms can help preserve leverage, reduce unexpected payment obligations and prevent disputes after the event.
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©Copyright 2026. Barbara Dunn. All rights reserved under United States and international copyright laws.
Barbara Dunn is the Attorney & Owner of Barbara Dunn Law PLLC. With over 30 years of experience advising nonprofit and for-profit organizations in the meetings, trade show and hospitality industry, Barbara is nationally recognized for her practical, solutions-oriented approach to contract negotiation and legal compliance, and has served in leadership roles including President of the Academy of Hospitality Industry Attorneys. Barbara is a frequent speaker, legal columnist, and co-founder of the Legalease with the Ladies® webinar series. She is admitted to practice in Illinois, Missouri, and the District of Columbia, and is an alum of the University of Michigan and the University of Illinois Chicago John Marshall Law School. Barbara can be reached at barbara@barbaradunn.com or (312) 825-3880.
This article is provided for general informational purposes only and does not constitute legal advice. The information contained herein may not be applicable to your specific situation and should not be relied upon as a substitute for professional legal counsel. Readers are strongly encouraged to consult an attorney regarding any legal questions or concerns related to contracts or risk management to ensure that their individual circumstances are properly addressed.
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For 20+ years, the MEET family of products have provided regional and national resources that have kept corporate, association, medical, education, independent, and religious meeting and event planners informed about relevant vendors, industry news, tech innovations, and resources that impact and influence how and where they plan their group business.
For 20+ years, the MEET family of products have provided regional and national resources that have kept corporate, association, medical, education, independent, and religious meeting and event planners informed about relevant vendors, industry news, tech innovations, and resources that impact and influence how and where they plan their group business.
