President-elect Donald Trump has promised sweeping changes in 2025, prompting many business leaders to begin planning for the potential impact that new government policies may have on their organizations. Trade associations representing business interests across a range of industries and professions are among those anticipating changes, including how members' 2025 conventions and tradeshows may be affected.
For professions or industries expecting growth, associations may see a swelling of attendance at upcoming events, including more government officials and/or international participants registering to attend annual conferences. In sectors confronting challenges such as supply shortages, increased prices, or employment disruption, event attendance may shrink and international trade show exhibitors may scale back on participation.
Legal counsel can help associations assess opportunities and constraints that may be ahead in 2025 by reviewing existing contracts, commitments for registration and exhibitors, and government official participation in proceedings. Below are specific areas of focus that associations may wish to revisit for this purpose:
1. Hotel and Space Contracts
A review of contractual commitments with event venues can provide insight into the feasibility of changes to room blocks, food and beverage needs, and meeting space. Many contracts of this nature include provisions for remedying scaled attrition with liquidated damages.
Prior to negotiating any revisions, it is useful to understand how the venue is making money. For example, hotels typically derive 80-90% of their profit from hotel room bookings, so those can be the most difficult to reduce. Meeting space is typically leased (and fees waived) proportionally to the percentage of the hotel that a convention fills. Therefore, room block increases should come with reduced meeting space rental. Since food and beverage service is the least profitable component of an event contract, revisions (either reductions or increases) usually do not result in much change to cost per person.
Finally, review other venue-related agreements, such as entertainment facilities, in anticipation of any increased or decreased uses. This due diligence will inform associations how best to approach their requests to negotiate changes, which should be made now, as opposed to later.
2. Trade Shows
Review the contractual terms and conditions that have been offered to exhibitors to determine if the association has any vulnerability to late cancellations, such as (a) allowances for cancellations due to market changes, (b) cancellation deadlines that provide refunds, (c) refund demands if exhibit set up or break down is disrupted due to labor shortages, or (d) cancellations by international exhibitors resulting from new government policies (e.g., laws regulating the import of goods and equipment, pass-through tariffs, or business visa processes).
Another area of potential disruption is labor supply and reliability. Exhibit halls that rely on non-union workers are more susceptible to disruption, which can result in unexpected increases to the cost of labor. For example, in contracts that address the set-up and take-down details, is availability of this support guaranteed and are labor costs fixed? Union shops—often mandated at the largest exhibit venues—may have a more stable workforce, but may be more expensive and prone to strikes or similar disruptions related to political and contract changes. Moreover, although union labor may not available in some places at present, that could change as the market adjusts to new demand over the coming year.
By anticipating the best and worst case scenarios, associations can plan ahead to determine how to prevent problems or respond in real-time if circumstances demand a resolution onsite. Even contracts with strong damage protections do not always solve the problems on the ground when an exhibit is opening and closing. However, with some forethought, associations can take steps to protect their revenue, including offering any new exhibitors a different contract with terms that better protection the interests of the association.
Major reductions in a contract for a hotel, exhibit hall, or ancillary space might be negotiable if the association has confidence to promise a future booking date within the next several years.
3. Transportation and Shipping
Contracts with shipping companies, bus providers or travel agents are another area warranting review to determine the costs (if any) of reducing use or cancellation. As it stands now, travel and shipping arrangements across the border are likely to change as a result of new government regulations.
4. Insurance
Event insurance has value in risk management. Typically, event cancellation policies cover specific types of losses for circumstances out of the control of the policy holder. Many associations used their policies to recover losses incurred from pandemic-related convention and trade show cancellations. Most event cancellation insurance policies cover natural disasters and government shuts downs.
Existing policies can be reviewed to determine what financial losses and damages are covered. For example, if a trade show is cancelled next year, but other events continue, does the policy cover partial cancellations? Also, review how the policy defines "beyond or outside control" (e.g., work shortages) and consider modifying the policy to cover such instances.
Understanding key policy provisions is another proactive step that associations can take to minimize risk. Insurance companies may deny coverage for failure to comply with notice and documentation requirements. Likewise, impermissible payments to vendors (such as pre-paid hotel expenses) may be reason why such losses are not recoverable. Given the stakes, careful review of insurance policies and riders to identify and correct ambiguity is recommended.
5. Registration and Speaker Terms
A major source of revenue for any event are registration fees. Associations should have a firm understanding of the terms and conditions being offered to registrants, particularly with respect to refunds. Are refunds allowed for cancellations made within a certain number of day before the event? If early registration discounts are offered, do they come without a refund option? Are there instances in which refund requests will not be allowed (e.g., due to labor shortages outside the association's control).
Speaker agreements typically include licensing provisions which grant the association the right to use content derived from speaker's engagement for its own future purposes (e.g., on-demand recordings or written educational content repackage for sale to association members). Review these agreements to ensure the proper licensing terms are included, which may help with revenue generation in a year when registrations are down.
6. Government Official Engagement
With a new Congress and Administration on deck, associations are likely to invest in relationship building efforts, including inviting new government officials to attend events with their members. When an event involves government officials, the offer of participation must be within the legal limits for executive branch employees and members of Congress and their staff. Different statutes govern these two branches of government. Understanding these rules and potential constraints can make engagement at an association event smoother for the officials.
For instance, executive branch officials participating in industry events are legally required to accept housing that is modest and within a price range set by the U.S. General Services Administration. Appointees may face even greater restraints depending upon the standards adopted by each new administration. Standards in place for the House of Representatives and Senate require pre-approvals that can be time-consuming for the congressional office. Legal counsel can help anticipate these requirements and improve the chances of hosting a government official at association events.
Like the rest of us, associations are eager to see how new government policies may impact their planned activities in the coming year. With respect to their biggest conventions, trade shows and other events, it may be helpful to seek the advice of legal counsel to help prepare their business for potential changes in the political and legal environment. If you would like assistance with your organization's legal needs, please contact Anita Drummond at adrummond@outsidegc.com.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
