Meeting Mentor Magazine

October 2020

Could the Coronavirus Cause a Crisis for Your Event?

Meeting professionals who have been around for a while remember the pandemic scare of 2002-2003, when the severe acute respiratory syndrome, or SARS, infected more than 8,000 people and killed more than 700 in 17 countries. Now we have the coronavirus, which, like SARS, began in China and — at least so far — mainly is affecting people near the epicenter in China, although it, too, has already leapt across borders, having been detected in at least 28 countries in North America, Europe, Asia, the Middle East and Australia. As of this publication, more than 900 of the 40,000-plus people who have been diagnosed with coronavirus have died from the disease.

How bad is it, and how bad could it be for meetings and events? While coronavirus updates are hitting the headlines daily, here are a few relevant facts:

Meetings currently scheduled to be held near-term in China are likely to be most affected by the outbreak.

• The World Health Organization on January 30 declared the emergence of coronavirus a public health emergency of international concern. This, of course, makes everyone, including meeting attendees, feel a bit jittery about traveling and congregating, especially since we now know that the virus can be transmitted from person to person. Adding to the woes for upcoming international meetings in China, the Centers for Disease Control (CDC) and the U.S. Department of State both advise against travel to China, and several airlines, including United Airlines, American Airlines and Delta, have suspended flights to that country.

• In a flash survey at the end of January, 80% of international Global Business Travel Association (GBTA) travel manager members said they believe their travelers likely will change their plans to avoid business travel; only 1% said it is “not at all likely” their travelers will avoid hitting the road due to concerns over the coronavirus. Their top concerns, not surprisingly, are for traveler health and safety, along with worries about travel disruptions due to airport closures, airline cancellations and/or delays.

• For already-scheduled events in China, the suspension of all transport in and out of Wuhan, where the outbreak originated, along with the suspension of all tour groups and flight and hotel packages for Chinese citizens, will at the very least make it impossible for attendees who live in that city to travel to meetings elsewhere. The restrictions make it equally impossible for those who live outside the city to travel to a meeting scheduled in Wuhan, the seventh most populated city in the country. Travel has also been restricted

Meetings outside of the hot zones also could feel the pinch.

• If you are expecting a large contingent of Chinese attendees — or others who have visited that country in the past month or two — at an upcoming meeting held in the U.S., you likely will see a drop-off in attendance, as the U.S. government is temporarily barring most foreign nationals who have recently been to China from entering the U.S.; U.S. citizens who have been in the affected regions face health screenings and potential 14-day quarantines. In a move not seen for half a century, U.S. health officials issued a federal quarantine order to compel 195 Americans who were evacuated from China to remain at an air base in California for two weeks.

What’s a Planner to Do?
The first thing meeting professionals facing meeting-related repercussions from the coronavirus outbreak should do, said meeting industry attorney John  S. Foster, Esq., CHME, attorney and counselor at law, Foster, Jensen & Gulley, LLC, Atlanta, is to learn all the facts that are currently available by checking the CDC website (CDC.gov) and the federal, regional and local health department sites of both your meeting locale and the areas from which your attendees hail.

Once you have a grasp on the facts, inform you attendees of the results of your due diligence. Then poll your stakeholders — attendees, speakers, sponsors, exhibitors, etc. —to find out what their intentions are. After Hurricane Katrina decimated New Orleans, Foster had clients who found their stakeholders overwhelmingly said that they would not come to the city at that time, so they had to cancel and hold the meeting elsewhere. Other clients found that their stakeholders were willing and able to come to the city.

“This should, first and foremost, be a business decision,” Foster said. “If it’s going to cost you more in losses to show up than to move the meeting somewhere else, then move the meeting somewhere else, and we can argue the legalities later.”

Speaking of Legalities…
When do you have the right to terminate your contract without liability or cancel without owing any financial damages due to coronavirus concerns?

Though there are legal defenses you can use even if you don’t have specific language in your contract, industry attorneys recommend that you include force majeure and/or cancellation clauses, and that you be very specific about what you expect will be covered, including examples so there is no ambiguity about the intent of each of the parties. “If your contract doesn’t have anything in there about force majeure or acts of God, you still have an argument to make, but you’re better off making it during negotiations than after the fact,” said Foster.

Review your contract and consult with an attorney to see where your sticking points may lie. A few things to think about, according to Foster:

• Many meetings industry force majeure clauses require the situation to make it impossible for one or both parties to meet their obligations, which may or may not be the case for your event. In addition to impossibility, other legal standards determining whether or not the meeting organizer and/or the hotel can terminate the contract without liability include commercial impracticability and frustration of purpose. See if your contract allows for a compromise, where circumstances are such that the group still is required to perform to the level that is possible or practicable but is released from requirements that the situation makes impossible or impracticable for the group to fulfill.

• There is a legal doctrine called frustration of purpose that allows one or both parties to terminate their performance obligations if events outside of their control frustrate their purpose in holding the meeting. But that purpose has to be outlined in the contract during negotiations: You can’t spring it later on. So you may want to include a clause stating the purpose of the meeting — say, to bring professionals from around the world in a specific industry for a trade show or a convention — and express that your obligation to the contract is based on your ability to get people to show up without being affected by events outside of your control. That way, if something happens that does frustrate the purpose of your event, you can point to that clause and say, “Here’s our purpose, and our purpose has been frustrated by these force majeure acts or occurrences, and therefore we have a right to walk away.” Foster said that, while it’s not impossible to make that happen if you don’t have that clause in the contract, it will be much more difficult.

• Get specific in your contract about any foreseeable situation that could affect attendee travel to your meeting, such as disease outbreaks and natural disasters (remember that Iceland volcano whose eruptions forced flight cancellations all over Europe back in 2011?). Be specific and use examples to make crystal-clear what the intentions of each party are.

• Also get in touch with your insurer to determine how the specifics of your coverage may or may not apply in the case of coronavirus-based travel restrictions. Even if your force majeure clause covers you fully for cancellation, you’re still going to be on the hook for other expenses, not to mention lost revenues. After SARS, many insurance carriers started excluding specific diseases as insurable risks, though you can pay extra to get the exclusion removed in most cases. Another tip: “Don’t limit termination of a contract to a specific-named disease,” he added. Foster advises planners to read the fine print to make sure they know exactly what is, and is not, covered under their plan.

Coronavirus Meetings Industry Resources

• “Covering Catastrophes in Contracts” Part 1 and part 2: email meeting industry attorney John Foster at John.Foster@FJGLaw.net for a copy of the two-part series.

• The Professional Convention Management Association’s Need to Know: Coronavirus page

• The U.S. Travel Association’s Emergency Preparedness and Response: Coronavirus page

• The Events Industry Council’s coronavirus resources page

 

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ConferenceDirect is a global meetings solutions company offering site selection/contract negotiation, conference management, housing & registration services, mobile app technology and strategic meetings management solutions. It provides expertise to 4,400+ associations, corporations, and sporting authorities through our 400+ global associates. www.conferencedirect.com

About MeetingMentor
MeetingMentor, is a business journal for senior meeting planners that is distributed in print and digital editions to the clients, prospects, and associates of ConferenceDirect, which handles over 13,000 worldwide meetings, conventions, and incentives annually. www.meetingmentormag.com

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