Type: Law Bulletins
Date: 03/23/2020

Ten Things Event Organizers Must Do Now When Faced With Cancellation

Event organizers are facing the toughest of times. If you have an event scheduled in the next few months or even later in the year, you are facing what might appear to be an insurmountable task: cancelling or rescheduling the event. The practical and financial implications may seem overwhelming at first, but the following checklist should give you some clarity as well as help you both analyze and implement possible decisions.

1. Review and Analyze Barriers to Moving Forward and the Likely Necessity of Cancellation. If there is a reasonable chance that your event will be substantially affected, may be forced to cancel by governmental orders or will be unsafe (or perceived unsafe), then exploring options as far in advance as possible is crucial. Some factors to consider include:

a. When is your event? If it is soon, cancellation may be inevitable.
b. If several months out, what is the likelihood that it will have to be cancelled?
c. Are there special considerations based on the type of event or industry? For example, are you in healthcare or another industry where travel is not possible for the industry’s workers for the foreseeable future?
d. Is your event location outside of the United States or are a substantial number of attendees traveling internationally? Are travel restrictions in effect?
e. What is the feasibility to, and impact upon, the event, the attendees, the vendors and others of a last-minute cancellation (versus an advance cancellation)?
See this article for more information: “To Cancel or Not – A Checklist for Event and Conference Organizers

2. Review and Analyze Event Contractual Obligations and Other Potential Liability: Review all agreements and consider options and feasibility for transferring deposits and agreements to new dates. Check to see if agreements have a Force Majeure clause or other cancellation clauses. Some key obligations include:

a. Venue(s) and hotels: Conference space, theaters and etc. Hotel room minimum obligations. Many hotel agreements also require a minimum food and beverage purchase. Many hotel agreements also include a cancellation clause that may be useful in this case.
b. Presenters/speakers/performers/other entertainment:

i. Fees and deposits paid.
ii. Flights (Is there flight insurance, can flights be changed and what are the fees?).
iii. Hotel reservations (Can hotel rooms be cancelled or moved to a new date; are deposits or charges refundable?).
iv. Per diem/other obligations.

c. Sponsors: What are the event’s obligations to deliver a product by a certain date? Will the event be in breach of the sponsorship agreement if the event is rescheduled?
d. Food vendors
e. Trade show vendors
f. Production & conference supply vendors:

i. Set, audio-visual, lighting, trusses, screens, tables, chairs, tents, etc.
ii. Deposits made (Are they refundable or transferable to a new date?).

g. Supply and service vendors:

i. Welcome bags and giveaways.
ii. Miscellaneous supplies (name tags, conference app licenses, ticketing and registration, printers, etc.

h. Staffing:

i. Compensation obligations to event staff, security, etc.
ii. Travel and per diem.

3. Review Insurance Policies: Most events have insurance policies that range from comprehensive general liability and event cancellation to business interruption. Ask your broker for full copies of the policies (not just the declaration pages) and ask, in writing (or confirm by email), if the policies cover your event’s cancellation under your specific circumstances. Once you have copies of the policies, contact an insurance expert. Most big law firms have insurance law attorneys or even separate insurance groups. For example, Taft has Ingardus, a wholly-owned insurance consulting group with extensive insurance expertise. Reach out to your organization’s in-house or outside counsel to review your policies to determine your rights under your specific policies and circumstances.

4. Review Options for Alternative Dates: Changing an event date is very difficult. Consider how much work went into selecting the original date. Getting everything aligned is a challenge. It is unlikely that any new date options will be as ideal as the one you have. Accept that fact, but also consider that moving the date still may be a better option than full cancellation. New date considerations include:

a. Hotel and venue availability: Does the hotel have enough rooms available? Do you need to contract with satellite hotels and venues?
b. Competing events: Note that other events may be moving their dates as well; it would be prudent to contact other similar/industry events’ organizers to see what they are considering before settling on a new date.
c. Season: If you are changing seasons, how does that affect your ability to execute your planned event, or what changes will be needed? Moreover, the season could dramatically affect air and hotel costs as seasonal rates may change.

5. Conduct Surveys: Surveys can help organizers understand the needs and preferences of its attendees and stakeholders. Making decisions on speculation or anecdotal evidence means risking making the wrong decisions. There are many tools that can be used to conduct simple surveys that would provide a world of useful information, including Google Forms, Survey Monkey and stand-alone form applications like 123 Form Builder. Consider sending a survey to your speakers, presenters and entertainers first, followed by your trade show vendors and attendees. Make the subject line of the email notable; for example “URGENT – [YOUR EVENT] POSSIBLE RESCHEDULING – 3 Quick Questions!” Keeping your surveys short and simple will help garner more responses. Start by identifying two to four key pieces of information that you need to know as you are analyzing cancellation or rescheduling. For example, it might be useful to know if the attendees would still attend the planned date if the current situation improves, if they would be willing and able to attend on the proposed alternate dates (or they can choose between two or more possible dates) or if they would take a credit for a future event rather than demand a full refund.

6. Begin Discussions with Each of the Above Contractors to Explore Options: Consider your legal options and bargaining power. Is your event an annual event? How long has it been in existence? Do you have a long history with the contractor or vendor? How badly do they want your future business? Do you have relatively strong rights regarding cancellation or an argument regarding Force Majeure that will allow you to arguably back out of the agreement? Once you evaluate your obligations and bargaining power, reach out to your contacts and explore options:

a. Will they agree to reschedule and apply your full deposit?
b. Are they available on your proposed new dates?
c. Will they refund anything if you cancel?
d. Will they demand full payment on your outstanding balance if you cancel?
e. Will they consider a discount or credit for next year’s event?

7. Do the Math: Once you have an idea of what your remaining obligations will be if you cancel or reschedule the event, and you have an idea of what percentage of attendees will still attend, demand full refunds, etc., you can start projecting revenue and expenses in different scenarios (cancellation, rescheduling or proceeding as planned). Although the financial projections will likely be a major deciding factor in the decision to cancel, event organizers also have to consider the long-term impact of their decisions. For example:

a. Will the decision affect the goodwill of the event?
b. Does it expose the event to potential legal liability?
c. Will a rescheduled event later in the year affect the next year’s event attendance, especially if the events are less than six months apart (this is a great survey question as well).

8. Communicate with Registered Attendees, Potential Attendees and all Stakeholders Throughout the Process: Communicate clearly and often with your attendees and stakeholders. Transparency is a must! Let them know often that you are monitoring the situation, working hard on the issue and exploring options that will impact them as little as possible. Be honest and clear regarding what options you are considering, and give a deadline as to when you will make a decision. Try to answer emails and inquiries quickly and fully address the concerns set forth. Make your attendees and stakeholders feel like the most important person and that you are looking out for their needs. Maintaining goodwill in tough times will go a long way to maintaining loyalty for the long-term.

9. Set a Deadline: As mentioned above, setting a deadline is important not just for your attendee and stakeholder’s piece of mind, but for your own. If you decided that you cannot wait until the last minute to make a decision, decide on the date of the last possible day that you can make a decision to cancel or reschedule. The date will need to balance the needs of the event, attendees, sponsors, vendors, presenters, speakers and entertainers, along with practical considerations like booking a new venue and hotel before someone else does.

10. Make and Execute your Decision:

a. The decision: This is the hardest part, but hard decisions make great leaders, and great leaders make hard decisions. The good news is, if you have done all of the above, you will be in a good position to make a well-informed, data-driven decision that considers the needs of the event and its stakeholders. If the decision is not yet obvious, list your options and make an old-fashioned “pro and con” list. If it is a close, it might be prudent to go with what is likely the more conservative option, and reschedule or cancel the event.

b. The decision is just the beginning: Once you have made the decision, there is plenty to do.

i. Confirm the venue.
ii. Re-confirm speakers, presenters and entertainment. If they can’t attend the new dates, see if they can attend the next year instead (and see if you can recover costs (deposits, air fare, etc.)), and see if they have recommendations to replace them for this year.
iii. Confirm and reschedule all vendors and contractors.
iv. Update the event website and customer forms.
v. Confirm hotel room changes.
vi. Communicate the decision to attendees and stakeholders, providing transparency and clarity regarding what is happening and what options they have. Consider an automatic registration for the new event, but provide an online form for attendees to change their options or easily select their choice (e.g. refund, attend the rescheduled event or a credit for the next event).
vii. Make it easy for attendees:

1. Keep their options as simple as possible. In the initial communication, include the reason for the cancellation/rescheduling, the new dates and location, and reason for the new dates, information on options, links to full information on the event’s website, and information on how to get further support (customer support email, telephone, chat, etc.).
2. Consider a default, automatic choice for the perceived most popular option. For example, those that want to attend the rescheduled event don’t have to do anything. Their registration was automatically transferred. If they prefer a credit or refund, they can change their option using an online form.
3. Consider perks and accommodations to attendees and stakeholders, for example:

a. Discounts and credits to future events.
b. Hotel, spa or resort credits.
c. Complimentary meals or gift cards.
d. Complimentary drink tickets.
e. Free or discounted event merchandise.
f. Additional sponsor swag, work with sponsors to see if they wish to co-brand items.
g. Free or discounted webinars, continuing education, or online content and resources.

4. Announce changes first privately to stakeholders—presenters, vendors, and attendees—then announce publicly by website and all media channels (Note the information can be on the website but not yet publicly on the homepage when you first announce privately).
5. Communication channels: Decide on how to best communicate (e.g., email, text, social media, etc.). You may need to consider how urgent the situation is. For example, if you are more than a month or two out, an email followed by social media posts may suffice. If you are within a week or two, a mass text message plus email and all other channels may be necessary.
5. Be ready:

a. Despite your best efforts at delivering the message with simplicity and clarity, there will likely be an onslaught of calls and emails from confused attendees asking for help.
b. Your staff should remain positive, patient, friendly and helpful at all times, despite the likely stress and frustration this will ignite.
c. Consider posting an FAQ on your website and linking to it in all communications, on the website, on the support page, etc.
d. Consider online engagement via social media and chat groups.

While the tasks ahead may seem daunting—and they are—remember that, as an event organizer, you did not create the situation, but you are tasked with resolving it. Your team and stakeholders will understand your situation, and will likely give you some leeway. You have a chance to retain their loyalty if you remain engaged and transparent. Consider this an opportunity to show your event’s true colors. Be clear and decisive, but communicate often and with empathy. It will be unanticipated hard work, but if you follow each step—one at a time—you will get through this and your event will survive this crisis.

Please visit our COVID-19 Toolkit for all of Taft’s updates on the coronavirus.

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