Marriott International’s decision to cut commissions for group bookings in the U.S. and Canada from 10 to 7 percent beginning March 31 set off a ripple effect, with Hilton now following suit beginning October 1.
Here’s what our 2018 Meeting Planner Advisory Board and other influential members of the industry are saying about the commission cuts:
“Independents, OMNIs, Hyatts, Fairmont’s and all of the great franchise properties take notice: Business is going to increase at your properties based on these decisions. Rest assured we are happy to work with those who have been and continue to build the relationships necessary to conduct business fairly and honestly for both sides.” —David Bruce, founder, Meeting Planners Unite, on LinkedIn. (Join Meeting Planners Unite here.)
“Little thought seems to have been given to the many corporate event departments that rely on commission-driven agencies to help them manage their workflow. In some cases, agencies rebate a portion of their commissions to help directly fund those departments.”—Howard Givner, founder and executive director of the Event Leadership Institute, in the MPI blog.
“Just like all companies, hotels are looking for ways to be the most profitable. The 3 percent now goes straight to their bottom line.”—James Vachon, Takeda Oncology, Prevue 2018 Advisory Board member
“The recent groups commission reduction, however well stated, does little to strengthen hard earned loyalty, preference or advocacy. Many corporate SMM programs are partially supported by commission funding and are negatively impacted. What is disappointing is the lack of “partnership” in recognition of an industry practice supporting their preference in the selection process It’s SMM/compliance sourcing teams driving the corporate business to preferred partner hotels, and these moves change that. For the hotels who are NOT changing commissions, this is an opportunity. Perhaps it’s time for SMM business owners to review the value of preferred hotel partners and redesign your program? In the end, we all have to make decisions that are right for our business.”—Carolyn Pund, CMP, CMM, Prevue 2018 Advisory Board member
Addressing Marriott directly on LinkedIn: “Allow me to cut through the BS and tell you what you really should have said: ‘Our mounting, astronomical costs from global expansion (most recently the Starwood acquisition) have caused us to lose focus on serving the customer, investing in facilities, meetings products and every other Bill Marriott pillar of success. Since we’ve grown so big we are going to raise prices drastically for everyone AND not pay partners what we used to pay.'” —Kip Lambert, chief culture officer/brand ambassador, Destinations, Inc.
“SPIN’s membership is 40 percent small business owners/third-party planners…Small businesses matter, too (most of which are women-owned in the U.S. M.I.C.E. industry, it bears noting). Demand equal commissions for your small business by joining voices with others to leverage our collective buying power. Alone, we are too small to matter to the world’s largest hotel chain. Together, we can show them our collective worth.”—Shawna Suckow, CMP, SPIN founder and Tracey B. Smith, CMP, CMM, SPIN executive director
(Sign SPIN’s petition here)
“I think that where both Marriott and Hilton have failed on this announcement is in their handling of this change process and communication. Following the announcements, there have been a few great articles that really explain the rising costs, that explain why 4 of the ‘big box’ sourcing vendors are being ‘protected,’ they aren’t, they are just honoring existing contracts, and deeper explanations as to the ‘why’ behind this change. If Marriott and Hilton had used some better change management practices, I don’t think there would be such an outrage in the community but instead a sense of partnership. However, when you do a poor job of communicating change, resistance is the natural and default human behavior.” —Nikole Fridenmaker, CMP, Association of Change Management Professionals, Prevue 2018 Advisory Board member
“In a corporate environment, most of the sourcing and contracting are done by in-house planners. Both Marriott and Hilton brands are very flexible and listen to our business needs as it relates to contracting meeting space and sleeping rooms for our events.”—Anonymous planner, Prevue 2018 Advisory Board member
“The floodgates are now open for the larger hotel chains to lower their commission rates for meetings alongside Marriott and Hilton. This affects many of my partners and connections and I feel for them.”—Evelyn Hall, Credit Union of Texas, Prevue 2018 Advisory Board member