The Business Impact of the Coronavirus: Check Your Contracts and Keep People Safe

By Natalee Giamalis, CMP

The news of Mobile World Congress cancelling their massive, international business event last week drew attention to areas of risk that many outside the event industry may not have considered regarding the coronavirus outbreak. In an ever-increasing globalized world, the impact of the health and safety of one area or nation is never confined by geographic borders -- this is especially true for the tourism and events industries.

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In 2019, the World Travel & Tourism Council reported that business travel accounted for 21.5% of the overall spend for travel and tourism in their annual economic impact analysis. This large market share is vulnerable to global catastrophes of all shapes and sizes, as we have seen through natural disasters like the 2010 eruptions of Eyjafjallajökull in Iceland, political unrest such as last year in Hong Kong, labor disputes as we have seen with Lufthansa and France’s National Rail, and the list goes on and on.

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This perpetual vulnerability is why contract clauses within the meeting and event industry are absolutely critical for all parties involved.

For both the buying and selling parties of a contract, the force majeure clause can be seen as a safety net for the many things that fall outside of the realm of control, or as the phrase goes, “an act of god.”

But before signing and conceding that the net will be there to catch you, we recommend to pause and start a conversation among all parties involved. As we are seeing with the coronavirus outbreak, the list of items that could qualify as “an act of god” or “unexpected disaster” grows longer the more globalized we become.

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Without further defining what force majeure means in a specific clause, both parties may be at risk. In the case of force majeure too much left to the imagination or interpretation may not cut it for a growing list of vulnerabilities. If a force majeure clause is short and sweet you may want to ask for an addendum to further define specific concerns that you would like called out.

As noted by all articles on this massive event cancellation, our hearts go out to all of those affected by the coronavirus outbreak because that is what this is truly about: the health and safety of people. Our industry is about connecting and engaging people and the long list of vulnerabilities exists to protect all in attendance. Although the human element seems distant in the above text it is truly the motivation; in an effort to do the right thing, care for people, and keep their well-being top of mind, the event industry will forever be required to take preventive business actions prior to a catastrophe ever taking place.