Regulation & risk
Force majeure
What Force majeure means
Force majeure is a contractual clause that excuses a hotel or client from legal liability and performance obligations when unforeseeable, extraordinary events beyond either party's control—such as natural disasters, war, or government-mandated travel bans—make fulfilling the agreement impossible.
How it is used
Operators trigger force majeure to cancel massive group bookings, corporate contracts, or vendor agreements without paying severe breach-of-contract penalties. Revenue managers and legal teams evaluate these clauses during crises to determine whether prepaid deposits must be refunded or rolled over to future dates. During contract negotiation, hotel owners push to limit force majeure definitions to absolute impossibility of performance, preventing corporate clients from invoking the clause merely because attendance drops, economic conditions worsen, or travel becomes inconvenient.
Worked example
A hurricane causes a mandatory evacuation order for a coastal resort, forcing it to close three days before a 400-room corporate conference. Because government action physically prevents hotel operations, the resort invokes force majeure, voiding the $120,000 contract and refunding the group's deposit without incurring additional breach penalties or damages for non-performance.
Common mistake
Hotel operators often mistakenly assume financial hardship, low attendance, or fear of travel legally qualifies as force majeure without explicit language covering those specific scenarios.