Reference no: EM132889123

Case Study: Making Alternate Plans because of a Volcano

Steve has worked for the Courier Hotel in London as a meeting planner for four years. During his time there he has brought in a lot of business to the hotel and is seen as being great with potential clients. After many years of negotiation, he finally brings in Contech Financial for their yearly convention of all their sales reps from around the world. During this convention, Contech will use all the meeting space located at the Courier, as well as use the in-house bar and catering for all meals, so Steve is looking for a rather large profit from this event. One week prior to the event a volcano in Iceland erupts, putting ash into the sky and grounding all air traffic across much of Europe. With there being so little time before the conference starts, Steve is worried about the event cancel- ing. Usually Steve would not worry too much because he would still get money from the group if they canceled. How- ever, in talking with Contech, he was reminded of the Act of God clause that was put into the contract, meaning that if this volcano caused air travel to be stopped, the meeting could be canceled at no charge. After several calls to local airports, Steve finds out that every airport near London expects to not resume any flights for at least a week- after the dates of the Contech meeting-and probably more. Steve finally finds out that an airport across the English Channel expects to resume inter- national flights in two days since it was not being affected by the ash as much as England. Steve comes up with a plan to shuttle people across the English Channel from this air- port in order to still accommodate their meeting. Steve contacts Contech and lets them know of the new plan, and tells them exactly how much extra the shuttle will cost. The company grows angry over the fact that Steve is requiring them to pay for the shuttle, which will add a few thousand more pounds onto their already large bill for the meeting. Contech tells Steve that unless the Courier Hotel, picks up the bill for the shuttle the company will have to can- cel the meeting as they are already at budget.

1. Should Steve agree to have the Courier pick up the bill for the shuttle?

2. Was it wrong of Steve to suggest that Contech should pick up the bill for the shuttle in the first place, consideF ing that the company already had an out in their contract?

3. Steve has obviously gotten Contech upset about the shuttle. What could Steve do to assure that they that they not only keep the event scheduled as planned, but also make sure that they return for future events?

4. Is the attrition clause in the contract enforceable since many of Contechs employees may not be able to change their flight plans?

5. Will the extra cost for the shuttle offset airline costs that attendees wwould incur if the meeting was cancelled?