Important: Hotels should review group contracts now
Last week, California’s Attorney General announced that California is adding Texas to a short list of states in which California state-funded travel is banned.
Hotels should review their group contracts now to be ready for attempts by groups to cancel meetings or events that were scheduled in Texas based on the new California state travel ban.
The State of California’s ban comes in response to the Texas Legislature’s passage of HB 3859 in the 2017 regular legislative session, a bill that allows private and nonprofit adoption and foster care agencies to refuse services to children or prospective parents on religious grounds.
This legislation has been perceived as discriminatory by LGBT advocacy organizations, which argue that various adoption and foster agencies may refuse services based on a child or prospective parent’s sexual orientation. HB 3859 passed the Legislature along partisan lines with 63% of Texas state lawmakers voting for it, and with the strong support of both the Governor and the Lt. Governor.
Groups that have meetings scheduled in Texas can choose to cancel contracted meetings and events in response to political developments. However, the treatment of these cancellations is almost always resolved according to the terms of the written contract between the hotel and the event organizer.
Unless the executed hotel event contract allows for cancellation due to a change in state law that prohibits or impairs the travel or event, the new state would not generally affect your existing contract for the event. If a group still holds out that it cannot in good conscience honor its contractual commitment to meet in Texas, then it will in most cases need to pay the cancellation damages owed for canceling the meeting.
Hotels should also note that enforcing contractual cancellation policies can serve to diminish the onslaught of other groups attempting to cancel without paying damages to the hotel.
It should also be noted that California’s travel ban affects only California state-funded government travel to Texas. It is unclear at this time whether the ban also applies to California’s state universities; the California AG is expected to release additional guidance on that point later this week. We will provide further updates on this and other related issues as they arise.
Please do not hesitate to contact us: / 512-474-2996.