SAN FRANCISCO
The issue of hotel commission cuts—both in a current sense and perhaps as a worrying trend that may spread to other major hotel chains outside of the Marriott-Starwood empire—ranked as the top concern among the industry professionals in attendance at the MPI Northern California Chapter's (MPINCC's) Annual Conference & Expo (ACE) 2018, held Feb. 27, 2018, at San Francisco’s Moscone West convention center.
The annual event's goal is to provide a productive day of education and networking for meeting planners.
Demonstrating the power of an emerging meeting format called “Dotmocracy,” in which attendees select education session topics on the fly by affixing colorful dot stickers to sheets with a number of topics, ACE participants overwhelmingly chose “hotel commissions” as the topic of most concern.
This was followed by “cancellations and contract enforceability”; “lack of inventory”; and “limited budget.”
Marriott recently cut most independent planners’ commission rate to 7 percent from 10 percent at its properties in the U.S. and Canada. The cut does not currently apply to other international properties.
Topic selection and subsequent discussions were facilitated by the MPI Academy’s Jessie States and planners then formed smaller groups to focus on the hot-button issue.
Widespread Concern Over Marriott's Commission Cuts
Group members were uniformly concerned about the impact the commission cuts will have on their livelihoods.
Groups also noted that planners who act merely in a site selection capacity may not be deserving of the previous commission rate, in favor of full-service planning companies that “book and cook” a meeting in all stages of its lifecycle and other members advocated moving toward the fee-for-service model.
“Marriott opened a can of worms,” said one planner, adding that her company, which is currently boycotting Marriott properties, is seriously exploring changing its business strategy to be more of a fee-for-service model. “They’re taking revenue out of our pockets. I can understand that for planners who only book the meeting.”
A supplier participant built upon the planner's opinion, pointing out there’s a huge discrepancy in how much money is spent on commissions and what work is actually being done to facilitate a meeting.
“I want to see a better correlation between the money being spent and the work that is actually being done,” he offered.
Both planners and suppliers expressed concern that the Marriott move may quickly spread to other major chains, such as Hilton and Hyatt. Marriott has the muscle to experiment and sway others, after all.
Tactics that are being employed by independent planning companies include giving commissions back to their clients and charging for services on an a la carte basis (essentially a fee-for-service model).
One planner brought up the idea that an equation that includes room rebates could at least be a partial solution to the problem. Another planner in attendance said she is exploring charging a flat $500 service fee to do even the most basic up-front work that goes into determining whether a hotel may be a good fit for their meeting, and then charging for other services from there as the planning cycle progresses.
