Group reservations

I'm currently working on creating a procedure to handle group reservation requests, as well as a group contract and policies. We get a fair number of groups here and there hasn't ever really been anything in place to help us understand how to work with them. The previous managers used to let groups come in and basically have run of the place, and I guess that worked fine for them, but not us!
We had a group last November that had booked the entire property- all 20 rooms- for a weekend. Then, two days before their arrival, each individual guest began calling us with the most ridiculous excuses you could imagine (common ones like their too sick, have to work, or their brother died, but also ones like they hit a deer or it's too cold!). Since they had each cancelled within our typical 48-hour cancellation window and because we didn't have any other group agreements with them, there wasn't a thing we could do except hope to pick up some last-minute reservations and recover as best we could. We had turned many people away for that weekend, so it really hurt us a lot...
I don't really think it's necessary to charge attrition for group reservations with a Cut-Off Date at least 3 weeks out, since I think that will generally provide adequate time to sell any unreserved rooms and I think the idea of attrition scares many groups away. My thought is to say that the group as a whole can cancel anytime before the Cut-Off, but after, they would be charged 100% of the lodging revenue. Cancellations of individual guests within a group after the Cut-Off Date of will be charged for the 1st night plus tax. But, what's to keep a group from doing the same thing as the PITA group from last November?
Any ideas on how you'd handle this situation?

Our group reservation requires 50% down and 50% 30 days prior to arrival. If they cancel before 30 days out they get their refund less a cancellation fee of $25/room. If they cancel inside the 30 days they get 50% back.
We take individual credit cards to charge each room separately unless the organizer wants to pay the whole thing.
If they reserved the whole inn, they have to fill the inn or pay for the rooms they canceled. I won't force 1 or 2 random other guests to put up with 5 rooms who 'rented the whole house'.
Sorry you had to deal with that group.

My "whole house" is 3 rooms - so far, so good when a family has booked it all showed up. AND all were very nice.

I was someplace recently, and can't recall where I saw it, but it was a similar situation to yours and the manager (ie innkeeper) had one point person for the group booking, period. That key person herded the folks and any cancellations came from that one person. If not, then that person was the one to pay, and so that made it happen.
An analogy would be of a wedding planner.
You speak to the wedding planner and they organize what would be chaos to everyone involved, every vendor.

We had a couple of situations similar to yours, so we had to change our policies. We only have 7 rooms and a cottage so we are no where near the size. But our policy is 50% down, non-refundable, for whole Inn rentals and then the standard cancellation policy for the other 50%. We have never had anyone balk and we have not had a repeat of the cancellation flu.

Your November Group 'Cancel Flu' is the reason why many of have strict policies for groups. Once one person comes down with the bug others are sure to follow. For small properties (yours is much larger than most here) we can not recover from this.

Our policy is usually 30 day cancel - all or part of the group. At 30 days full payment is required. For big event periods or certain holidays the cancel date may be 60 days.
I prefer one person be responsible for the entire group but I want email addresses for each room and copy each with the policies.

We do $20 PEr room on booking and balance 20 days out - not messing about with groups as don't really want them anyway, more trouble than they are worth.

When we opened our banker told us to not be too nice to people letting them cancel at last minute because he was going to want his money on the first of the month no matter what. He'd seen too many properties not doing well because they were lax and had the 'we're in the hospitality business we need to be flexible thought' - he said the most important word in that sentence was business and remember the we were investing over $1M to created this beautiful place for people to visit and we had to pay that back on time, every month no matter how bad the weather was, or someone changed their mind, etc. We made the investment and they need to honor their reservations so our kids didn't lose their home.
Whole house has to be booked and paid for by one person - no individual reservations. 50% deposit at time of booking by check. Balance due 45 days out (again by check) along with $500 damage deposit. All is spelled out and signed in agreement at time of booking.

MtnKeeper said:

When we opened our banker told us to not be too nice to people letting them cancel at last minute because he was going to want his money on the first of the month no matter what. He'd seen too many properties not doing well because they were lax and had the 'we're in the hospitality business we need to be flexible thought' - he said the most important word in that sentence was business and remember the we were investing over $1M to created this beautiful place for people to visit and we had to pay that back on time, every month no matter how bad the weather was, or someone changed their mind, etc. We made the investment and they need to honor their reservations so our kids didn't lose their home.
Whole house has to be booked and paid for by one person - no individual reservations. 50% deposit at time of booking by check. Balance due 45 days out (again by check) along with $500 damage deposit. All is spelled out and signed in agreement at time of booking..

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This is a great way to put it.
An added note- On those very rare occasions when we slipped, we had that awful feeling of having let ourselves and the business down. We learned quickly that the business must come first and then we learned how to be clear about our policies so that we wouldn't have to choose between happy guests and our business.

We're pretty steel-fisted about groups. We require the organizer to be on the hook for all the rooms they commit to, and within 30-days our cancellation policy says they pay for the full first night.

1 person is the contact and financial person. 50% non refundable deposit, non refundable balance due 30 days prior to check-in.
I give them no wiggle room.

PhineasSwann said:

We're pretty steel-fisted about groups. We require the organizer to be on the hook for all the rooms they commit to, and within 30-days our cancellation policy says they pay for the full first night..

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We're tougher still. One person only. Moving to 25% non-refundable deposit at 60 days- no credit. non-refundable balance due at 30 days.

Thanks for the responses everyone. I think I'm definitely going to tighten it up a bit!

the problem i see is being afraid that your policies will scare groups away.
but groups that don't show, that cancel - leaving you with a whole empty house to fill - are bad for your business.
guests that don't stay and don't pay are hurting you.
you have to put your policies in place and know that they are fair.
i've traveled with a group before. we were locked in and paid in full two months in advance.

Ah great groups.. I always have them asking for a discount also because they are taking a lot of rooms.
Usually they are just one nighters and often getting drunk...
What do you do if they book like 10 rooms online though?
I have seen 1 hotel on booking.com have a policy that if more than 6 rooms are booked then it will come under a group reservation policy.
Maybe I will ask booking.com if this exists? anyone know?

Small mom and pop motel, group policy depends somewhat on the timing.
At one time we promoted a package for senior adult groups for a mid-week visit, as we were not likely to be busy, it was usually a casual arrangement,
On the other hand I would probably discourage a youth group on a busy weekend due to last minute cancellations, rowdy kids, and as most want only one night, our declining ability to flip all the rooms at one time and be ready for the next night's guests.