by Heather Reid
Hidden fees in event contracts can cause frustration, mistrust, and budgetary surprises for event planners. These unexpected charges, often appearing on post-event invoices, include everything from unexpected WiFi charges, minibar restocking fees, in-room safe usage, and early departure penalties for sleeping rooms, to charges for meeting space items like HVAC surcharges for after-hours events, charges for using wall sockets, fees for lighting panel access, and outdoor space fees for heaters or umbrellas. Addressing the issue requires not only awareness but also proactive strategies to mitigate their impact.
“Post-event invoice shock” is a lived reality for many planners, and even those who haven’t experienced it firsthand often know someone who has. The problem is so pervasive that industry thought leaders have highlighted lack of transparency as a top concern for event planners.
A regulatory milestone, such as the U.S. Federal Trade Commission’s ban on “junk fees” for short-term lodging and live event tickets, reflects progress in tackling this issue. While this is a step forward for consumer-facing fees, many hidden fees in the meetings and events industry are client-facing, making it essential for planners to proactively address them.
Hidden Fees: A Question of Transparency
The term hidden fees often implies deliberate concealment, but many fees stem from a lack of proactive disclosure rather than outright deception. It’s critical to understand that identifying these charges is part of the event planner’s core role in safeguarding their event’s success.
By shifting the narrative to terms like “defined fees” or “undisclosed fees,” planners can foster better communication with suppliers.
Defined Fees
Defined fees are all costs, charges, and expenses associated with a service or agreement that are explicitly disclosed, itemized, and agreed upon by all parties prior to the execution of a contract. These fees encompass mandatory charges, optional add-ons, and ancillary expenses, providing complete transparency to ensure there are no unexpected or hidden costs. Defined fees allow for clear understanding and alignment between parties, fostering trust and reducing potential disputes.
Undisclosed Fees:
Undisclosed fees are charges, costs, or expenses associated with a service or agreement that are not explicitly communicated, itemized, or agreed upon by all parties prior to the execution of a contract. These fees often appear unexpectedly on final invoices or during the fulfillment of services, potentially leading to disputes and mistrust between parties. Undisclosed fees can include mandatory or ancillary charges that were omitted from the initial agreement or contract documentation.
Shifting our industry’s language from hidden fees to discussing both defined fees and undisclosed fees reinforces the need for clarity and transparency for the planner and their event, and provides business terminology for discussion purposes without accusing suppliers of bad faith.
How to Manage and Mitigate Defined Fees and Undisclosed Fees
Here are practical strategies planners can implement to minimize surprises and build more transparent partnerships with suppliers:
- Define Fees Early: During the RFP process, the planner should provide a detailed “Defined Fees Checklist” that suppliers are required to complete.
- Scrutinize Contracts: Carefully review contracts for vague terms or language, such as “at additional charge” or “labour rates may apply,” which can mask potential fees.
- Attach the “Defined Fees Checklist” document to the contract: Request that all fees be outlined in a formal exhibit attached to the contract. This ensures both parties have a clear and agreed-upon understanding of potential charges.
- Ask Questions: Don’t hesitate to ask for clarification on ambiguous terms or line items. Proactively addressing concerns can prevent conflicts down the road.
- Negotiate Proactively: Use site visits and follow-up meetings to clarify terms and address concerns. During this process, revisit the “Defined Fees Checklist” to negotiate and ensure alignment.
- “No Undisclosed Fees” Clause: Add a clause into the negotiated contract specifying that any undisclosed fees will not be payable unless decided upon mutually. This can act as a safeguard against unexpected charges appearing on invoices.
A Call for Change
The challenge of discovering, disclosing and documenting defined fees is not just a planner’s issue—it’s an industry-wide concern. Greater transparency benefits both planners and suppliers by fostering trust and reducing disputes. Suppliers that proactively disclose defined fees and include them in clear, itemized formats are likely to build stronger relationships with their clients.
As planners take steps to mitigate these challenges by using proactive language such as defined fees and undisclosed fees, as well as strategically negotiating with suppliers, they also contribute to a culture of accountability and clarity in the industry.
Heather Reid is founder and CEO of Planner Protect Inc. and is the owner of the newly launched “Certified Event Contract Professional” certification program. She consults and educates event hosts and industry professionals to negotiate balanced event contracts. CEOs, professional planners, and venue representatives alike, all recognize Heather as a trusted and knowledgeable expert in her field.
