For what it's worth, right after college many years ago, I used to work as a sales coordinator at a hotel and have a little experience with your situation.

One of the things to note when doing a contract is that you are being guaranteed rooms at a reduced rate (and in this case, it's $20 below the regular rate - but sometimes its more & sometimes its less, it usually depends on what's going on in the market and what's going on at the hotel and how many rooms you need and for how long). The hotel will guaranteed you those rooms for your length of stay at that price even if their rates go up, you're still able to get that price point.

What does your contract say in terms of cancellation? I would assume that there are attrition clauses & cancellation clauses in the contract. Your friend signed with these clauses. Your friend agreed to pick up 67 out of 84 total room nights. The hotel agreed to hold 84 room nights for you (that they could have potentially sold to another customer) with the understanding you were picking up 67 of them. And now you don't want to pick up any of them. Well, that puts the hotel at a potential loss (remember business are not charities - they are businesses - this is not just a Marriott thing - it's a Starwood, Hilton, Hyatt, InterContinental, Choice, Kimpton thing too).

You said you're having a hard time having them hold up their part of the bargain? What part of the bargain are they not following?

In this down economy, I'm sure hotels are being more flexible with their contracts - maybe try to use the attrition towards a future piece of business at the hotel?

Good luck with this - but I will say that my thoughts up front are that your friend signed a contract on behalf of the company - and now your company wants out. What if your clients signed a contract with you & then they decided they wanted out - would you just let them out because of the kindness (especially with businesses hurting as much as they are) or would you try to maintain your agreements so you can keep your staff employed? J

Just my 2 cents...