Attrition Rate
The percentage of reserved hotel rooms or guaranteed attendees that fail to materialize.
Definition
Attrition rate measures the gap between contracted commitments (typically hotel room blocks or catering guarantees) and actual utilization. If you block 200 hotel rooms and only 150 are used, your attrition is 25%. Contracts typically include allowable attrition percentages—exceeding them triggers penalty fees.
Understanding historical attrition patterns helps negotiate appropriate contracts. Industry benchmarks, event type, and economic conditions all influence expected attrition rates.
Why It Matters
Attrition clauses can create significant unexpected costs. Planners who overcommit on room blocks or F&B guarantees face penalties when attendance falls short, while those who undercommit may leave attendees without rooms or face higher per-person costs.
Managing attrition requires balancing risk—contracts that protect against low attendance often come with less favorable rates than committing to higher guarantees.
Examples in Practice
A planner negotiates 20% allowable attrition after presenting data showing their event historically hits 85% of projections.
An association monitors room pickup weekly and adjusts marketing efforts when trailing projections to avoid attrition fees.
A corporate event builds attrition risk into the budget, setting guarantees conservatively and treating any penalties as planned contingency.