Inflation Is On Everyone’s Mind

Here’s our approach to help you

We added a De-Escalator Clause to our contract, what is that?

In short, it’s a way to keep pricing fair for you, our customer.

Inflation is on everyone’s mind right now. It’s hard to know how long high inflation rates will stick around and/or what they might look like months into the future. Refreshing Mountain often quotes events 6-11 months in advance, so during this time of higher-than-normal inflation, we have needed to raise our rates to cover the anticipated increases in costs.

But what if inflation isn’t as high as it is being predicted by the time your event occurs?

We are hoping that costs will stabilize again soon, and if that happens, we want you to know that we will reduce pricing on your event, even if you already signed a contract showing a higher price. Additionally, we want to give you the confidence to move forward with the booking now, knowing that the price listed is the “max price” that you are agreeing to.

How it works

On your contract, on page #2, there is a number listed as the “De-escalator baseline percentage” (DEBP). This might be 6% or 8% or 10% or some other similar percentage.

Each month, the Bureau of Labor Statistics publishes a Consumer Price Index, tracking the costs of goods in various segments. For our purposes, we will be monitoring the specific metric “Consumer Price Index for All Urban Consumers: U.S. City Average, unadjusted 12 months” (CPI-U). If the % published as the 12-month average (on the month that is 60 days prior to your event, generally this will be 2 months before your event), is lower than your event’s DEBP, a discount will be added to your final invoice for the difference between the published % and DEBP.

CPI-U chart and Example

For example, if your event DEBP is listed as 10%, and your event is scheduled to occur in March 2022, per this chart, the 12 month CPI-U is 7.5% in Jan 2022 (2 months prior), which means you would get a 2.5% discount on the event.

In contrast, supposing that the CPI-U percent is higher than 10%, while you will not receive a discount on the event, Refreshing Mountain WILL NOT raise the pricing for your event, up to a max CPI-U of 14.9%.

Is there a corresponding Escalator Clause?

No.  We don’t believe that would be possible for you, the event planner, to reasonably plan for.  We have opted instead for a “ceiling” of how much inflation we can absorb with the pricing we have offered.  We will hold the pricing offered up to a 12 month CPI-U average of 14.9%.

If inflation were to exceed 14.9% (12-month average), Refreshing Mountain reserves the right to initiate the following process with you.

  1. RM may present you with a new pricing proposal, with any increases proportioned solely on the CPI-U index. If the new pricing is agreeable to you, and/or some other mutually agreeable price adjustment can be made, the event will proceed accordingly.
  2. If you, the customer, decide to decline the REQUESTED price increase, RM reserves the right to either proceed with the event at the originally contracted prices, or cancel the event, issuing a full deposit refund but absolved of any further financial liability to you. If RM exercises the cancellation option, we must give you at least 45 days advance notice before the event Start Date.

It should be noted that #2 would ONLY be a POTENTIAL outcome in the unlikely event that CPI-U listed inflation exceeds 14.9% on a 12 month average and ONLY if RM is unable to provide the contracted services at the contracted prices due to inflationary impacts on our costs.

In Summary

The pricing you were quoted may be reduced via a custom discount if inflation increase concerns are eased between when you book your event and when it occurs.  Also true, if inflation were to exceed 14.9% during that time, you would not be under any obligation to any price increase, but RM would have the right to cancel the event if we choose to do so, but only if we cannot mutually agree to a reasonable pricing adjustment based on the inflation realities at that time.

If you have any questions on this, please contact our Sales Team for further discussion.  information@refreshingmountain.com or 717-738-1490 x 4.