BUSINESS Navigating the COVID-19 Minefield When we find a suitable place and dates for our event, com- mitments include a sizable minimum number of hotel room nights (thousands), substantial minimum food and beverage obligations (well over $100K) and, of course, the usual and customary taxes and fees, which are typically more than 20%. If we don’t meet our substantial contractual event obligations, we must pay for empty rooms and plates. Thus the impor- tance of members booking their ALOA event lodging at the contracted hotel! Historically, we’ve geographically rotated SAFETECH among different cities, returning to Lexington, KY, (the center of the safe and vault universe) every two to three years. We try to alternate our annual ALOA Convention and Security Expo among the East, Central and West regions of the U.S., while also remaining profitable. In the years following 9/11 (which seriously impacted the travel and hospitality industries), it was basically a buyer’s market. But, gradually, capacity and demand shiſted, which is consistent with historical norms that tend to follow economic cycles. If we are to ensure suitable event space when we need it, we must book it far in advance. We then have no real assurances regarding future economic environments, exhibitors’/attendees’ commitments, asteroid/meteor strike threats, pandemic warn- ings or even a potentially life-threatening beer shortage! Event Cancellation Insurance Like the gadfly at a public company’s shareholders meeting, at this juncture you may ask, “Why doesn’t ALOA have insurance to cover unexpected event cancellations?” Good question! Re- mind me to give you extra credit on your grade, but don’t hold your breath! We’ve carried that event coverage for decades, and it really paid off years ago when a San Diego SAFETECH was impacted by a volcano. No, you did not miss a volcano erupt- ing in San Diego, but travel from Europe was disrupted. Un- like most insurance, this type of event coverage is sort of like a toggle switch inasmuch as a new policy is turned on just prior to an event, and then off very rapidly thereaſter. You might wonder why we book so far in advance. Another good question! As I alluded to earlier, the harsh reality is that ALOA’s event specification requirements are somewhat un- usual and relatively unappealing to event venues. This is largely because our event requirements are lopsided. We need lots of classroom space, but not an equivalent lodging capacity because many of our attendees are local or regional and do not need hotel rooms. From their perspective, a venue must essentially surrender a disproportionately large amount of meeting room (classroom) space that is, consequently, unavailable for other event customers. The hotel is leſt out of balance, with unsold 18 KEYNOTES JULY/AUGUST 2021 lodging capacity without equivalent meeting room capacity. This means they are limited to booking (for that same time period) other events that have the opposite profile of ALOA. As the virus evolved into a full-blown pandemic, we submit- ted our application for event cancellation insurance coverage, as is usual and customary. At first, the insurance company just sat on our application, and at the eleventh hour, it finally refused to issue the policy, presumably because they could see the writing on the wall about the rapidly deteriorating situation. By then, we had the makings of a plot for a new science-fiction movie. There was no doubt that our lives were about to change — and not for the better! Just like previous wars, this one would surely have lots of civilian casualties and collateral damage. Jockeying for Position Attendees and exhibitors usually plan their schedules and travel far in advance of the event’s date. In fact, at least half of our regular exhibitors customarily select their preferred booth space and place deposits at the end of the current year’s event for the following year’s tradeshow. Attendees have far greater flexibility (than exhibitors) and usually lock in the dates and eventually book flights as necessary. This means that, realisti- cally, go/no-go event decisions must be announced about 60 days in advance. But, by then (just like calling off a wedding at the eleventh hour), all sorts of implications are introduced, none of which are good. Try doing this when absolutely no one knows whether the venue will even be permitted to host the event! Of course, during the pandemic, normal had leſt town with no forwarding address. Although our budgeting and planning assumption is that our events will take place as scheduled, such decisions are not entirely in our hands. To be fair, our hotel and convention venues were not completely in control of their own destinies either. Country, state, county and city lockdown restrictions were inconsistent, and there was con- fusion regarding government mandates and policies, all hap- pening in a fluid environment. And so began the “posturing period” where hotel and con- vention venues and their clients engaged in a game of chicken, as each side maneuvered to avoid being the one to breach the legally binding contractual obligations. Fortunately, most such legal agreements include a “force majeure” provision (similar to the legally narrower term “act of God”). This is where either party can essentially pull the plug (without the usual breach of contract liability exposure) on their contractual obliga- tions under certain circumstances when, through no fault of their own, matters are beyond their control. Unfortunately, what constitutes a legitimate force majeure condition is not WWW.ALOA.ORG
