What Is an Attrition Clause?

An attrition clause is the part of a hotel group contract that sets what the group owes when it uses fewer rooms, or spends less, than it committed to. It may include a number or a formula for working out those damages (APEX Contracts Accepted Practices (Events Industry Council)).

Last updated: October 2026

How an attrition clause works

The clause measures the room nights a group actually uses against the room nights it promised, and that gap can be counted night by night or cumulatively across the whole stay (APEX Contracts Accepted Practices (Events Industry Council)).

Damages usually start only after an allowed shortfall, such as 80% of the contracted rooms, and buyer-side lawyers suggest charging each missing room night at 70% to 80% of the single room rate, so the fee deducts the costs the hotel saves on an empty room (Hotel Meeting Contracts: Navigating Legal Issues (Venable LLP, 2014)). A hotel's lost profit on an unsold room can run 73% to 85%, by one meeting planner's estimate (Contracts: Read Before You Sign (Prevue Meetings & Incentives, 2025)).

The amount is liquidated damages: a sum fixed in advance that the group pays if it does not pick up a set share of its room block (Attrition clauses: outstanding issues and recommendations for meeting planners (International Journal of Hospitality Management, 2005)). With liquidated damages agreed, the hotel is not required to credit rooms it resells, so a resale credit only applies when the clause writes it in and defines how it is calculated (APEX Contracts Accepted Practices (Events Industry Council)).

An example from a 2026 hotel contract

A 2026 group agreement between a convention-center hotel in Riverside and a charter school commits the group to 200 total room nights; if it uses fewer than 90% of them, it pays the gap at the average group rate plus tax, "as liquidated damages and not as a penalty" (Group agreement, Marriott Riverside and Sage Oak Charter School (2026)). The same clause also refers to a loss on "a reduction greater than 20%", so the contract states its threshold two different ways (Group agreement, Marriott Riverside and Sage Oak Charter School (2026)).

In that contract, the cut-off date is 17 July 2026, a month before arrival, resold group rooms reduce the charge by the rate received, up to the group rate, and group rooms are the last in the hotel's inventory to be sold. Free concessions and meeting space depend on a separate, lower bar of at least 80% of the room nights by the cut-off (Group agreement, Marriott Riverside and Sage Oak Charter School (2026)).

Why an attrition clause matters for hotel distribution

For the hotel, the clause establishes the group's obligation to meet its contract commitments. It also has to deal with how groups are booked: when group rooms carry commissionable rates, the clause should say whether attrition is calculated on the commissionable rate or net of the commission. A contract without a liquidated damages clause works differently, because the hotel must then mitigate its loss, for example by trying to resell the rooms (APEX Contracts Accepted Practices (Events Industry Council)).

Unsold block rooms typically go back into general inventory at a cut-off about 30 days before arrival (5 Tips to Avoid Room Block Attrition (Groups360)).

Attrition clause compared with cancellation and the cut-off date

 What triggers itWhat the group owes
Attrition clauseThe event goes ahead, but the group picks up fewer rooms than contractedA fee on the shortfall below the allowed threshold
Group cancellation clauseThe group cancels the booking entirelyA cancellation fee, often scaled by notice; in the 2026 contract above, 65% of guest rooms more than 180 days out, rising to full payment within 30 days
Room block cut-off dateThe date unreserved block rooms are released for general saleNothing on its own; in the 2026 contract above, the release does not end the group's obligation to use its rooms

Attrition and cancellation rows: Hotel Attrition Explained: Costs, Clauses & Solutions (Mews). Cancellation scale and cut-off row: Group agreement, Marriott Riverside and Sage Oak Charter School (2026)

Frequently asked questions

What is an attrition clause in hotels?
It covers attrition, the contract concept of not meeting agreed commitments such as room pickup or a minimum spend, as the meetings association MPI defines it. Hotel group contracts started using these clauses widely in the early 1990s. They remain one of the least understood and most contentious issues in the hospitality industry, according to a 2005 hospitality study.
What is an example of an attrition clause calculation?
Take a group that contracted 200 room nights with an 80% threshold and picked up 140. It needed 160, so the shortfall is 20 room nights. At a contracted rate of $150 a night and a fee of 90% of that rate, the attrition charge comes to $2,700. This is an illustrative example from a 2026 hotel software guide.
What does "no attrition clause" mean?
It means the contract charges the group nothing for rooms it does not use. Many hotels insist on attrition language, but buyer-side lawyers suggest groups ask for a "no attrition" provision, or a softer version: no fees at all if the hotel still meets or beats its average occupancy for that time of year.
Does an attrition clause cover food and beverage?
It can. Attrition charges may apply to food and beverage agreements and to meeting space as well as guest rooms. For food and beverage shortfalls, the same buyer-side legal guidance that suggests 70% to 80% for rooms suggests a lower lost-profit rate of 30% to 40%.
Is an attrition clause enforceable?
Generally yes, when the amount is framed as estimated lost profits. A reasonable damages figure agreed in advance is enforceable, whatever the hotel's actual losses turn out to be. This is general guidance for US association meetings from a law firm that advises associations, so each contract still needs its own legal review.

Where Jetstream fits

An attrition clause turns on rooms moving in and out of sale: held for a group, released at the cut-off, then resold if the hotel can. Jetstream builds an AI channel manager that connects a property's systems to the channels where guests book, and keeps rooms, rates and availability accurate on each one, managed from one place.