I think, you can write

<xsl:template match="/subscriptions/item">
  <xsl:choose>
     <xsl:when test="renewaldate">
        <p>Your renewal date for <xsl:value-of select="subscriptionname" /> is:
        <xsl:value-of select="renewaldate" />.</p>
    </xsl:when>
    <xsl:otherwise>
       <p>Sorry, there has been an error...</p>
    </xsl:otherwise>
</xsl:template>

Regards,
Mukul