To Group Contract or Not Group Contract, THAT is the Group Question!

You’re planning a group vacation. It seems logical that if you have a bunch of people traveling, people other than your immediate family, you should qualify for a discount, a group discount. Excitedly you call your Travel Professional to find out how much you can save. What you hear may not be what you expected. There may be requirements you didn’t know about, things like 10 PEOPLE don’t make a group but 10 ROOMS do. Or maybe you hear, “Yes, we can get you a free room, if you can pay a deposit and commit to a minimum number of rooms by signing a group contract.” It’s not quite as simple as traveling with more people than just your immediate household and the resorts throwing money back at you for bringing them business. Your Travel Professional is the person to talk to about your options. Depending on how many people are traveling, if the person organizing the trip has the funds to pay a deposit for a contract, if you think everyone is ready now, or if they may trickle in over time especially where the vacations is more than 6 months away, are just a few of the things to consider.

First, let’s look at the two basic types of groups. Assuming you have enough travelers to qualify as a group for your destination there are two basic options. The first option, and most flexible option is usually referred to as the “group code” type group. In this scenario your Travel Professional will reach out to the tour operator, like Gogo Vacations, and request a promotional code for your group. As long as the minimum number of rooms travel, everyone will earn a discount, for example $25 to $100 per room package, on the prevailing rate at the time the room is booked. When guests are ready they will contact your Travel Professional to book the vacation. Your Travel Professional will quote with the current price, and the discount will apply to that offer. Guests who book after the first person books their reservation could pay more or less depending on the prevailing rate at the time the guest confirms their reservation. “Group Code” discounts may offer other concessions, for example a free group cocktail hour, or a guarantee they will try to keep the rooms together, but the financial benefits are not as great as those who are able to take option 2. The “Group Code” option works great if you’re ready to book and the trip is next year and you’re hoping to rally friends to join you between now and the date of travel. The availability is based on what is available when people join the group. The pricing is also based on the current pricing when they decide to join the group. There is a risk of the rooms being sold out, or a significant increase in price, but there is little to no risk to the person who sets up this type of group. Most importantly, there is no additional financial commitment or risk with a “Group Code” type of group.

The second Group option is the Contracted Group. The CONTRACT. Contract is a scary word to some. Contracts can be a little scary. However, if you’re serious, and you have a serious number of people ready to join you, especially in the case of a student trip, destination wedding, family reunion, etc., the contract can really pay off. “Why a would I sign a contract?” you might ask. First, you have a guarantee of a certain number of a certain type of rooms at a guaranteed price. With a contract there won’t be any surprises in the cost, other than airfare which is seldom locked in with group pricing, but it is possible to also have contracted group air which is a topic for another day. The guarantee of room availability and room pricing can be very appealing when you’re sharing the details with a large group. The first question your guests will ask is, “How much does it cost?” It is also helpful for student groups or reunions who are trying to budget for how to pay for the vacation and need to know exactly what it will cost for planning purposes. Second, you have the ability to earn free rooms. These free rooms usually are provided in the form of a refund after travel to the credit card requested by the person organizing the group, in other words the person who signed the contract. The room credit earned can all be taken by the organizer, which may be a wedding couple, as compensation for organizing the group or to apply to the expense of the wedding itself. In the case of a school or church group the room credit earned may all go back to one person so it can be donated to the non-profit organizing the group. Alternatively, the money can be requested to be divided evenly back to each room who booked in the group. Additionally, besides the guaranteed pricing and availability, and the ability to receive credit back based on the number of rooms who travel, the person organizing the group can earn a complimentary room upgrade. Often the room upgrades come after meeting a minimum number of rooms, so more than one person can be upgraded if there are more rooms that travel. Finally, there are other incentives based on the number of rooms, reaching the minimum number of rooms, and not reducing your group below a certain number of rooms. The group contract can be a great option for many.

“The contracted groups sound great! It seems like a no brainer to contract a group. What’s the catch,” you ask? There are a few serious considerations for a contracted group. First, someone has to pay a deposit to secure the group. To secure the group contract a deposit must be paid when the contract is signed and will require paying money at the time of the contract signing to make the group possible. Often this deposit is non-refundable. The group deposit ranges from something like $50 per room to a one night deposit per room, which will vary with the price of the resort chosen. Second, when you sign the contract there are attrition penalties which will apply if you shrink the group more than a certain percentage below the original contract. The group deposit payer is taking a risk when they lock in a large number of rooms if circumstances prevent as many people from joining as they originally predicted may be able to attend. With a contract, the price is locked in so even if you find it for less later online you cannot break your contract to book the lower last minute rate. The contracted rate was agreed upon so you would know your cost and so that you would have rooms you need. You agreed on the price, and the resort set those rooms aside for you, took them out of their inventory keeping them from other guests so you could have them, and are hard pressed to not change the price. But we can always ask! Just know a price reduction later is unlikely.

Another consideration with a Group Contract is the speed at which the booking will happen. Please pack your patience as group contracts take longer than a traditional single room booking. The guest will have to be provided information to decide where they want to travel to. Once they decide where they want to stay the Travel Professional will request a group quote. Once the traveler approves the quote and decides their dates of travel, the number of rooms, and the type of rooms they want to secure, a group contract will be requested. There are usually one to two people in a resort who respond to these requests. They don’t work nights or weekends. They are not in a huge hurry. Please have patience with your Travel Professional who wants nothing more than to help you get your group booked as quickly as possible. The resorts need time to check their events, inventory, staffing, season pricing, etc. and have many factors to consider before they commit to taking these rooms off the market and promising them at a certain rate.

So, now you know the differences between a non-contracted group and a contracted group. Be sure to discuss your circumstances, budget, and the details of your travel party with your Travel Professional to make the best decision for your event. Whichever way you go, there’s no doubt traveling with friends and family has the rewards of memories and shared experiences you cannot put a price tag on.