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Commission Cuts Paramount Fear of Planners at MT LIVE!
Gather a room full of planners and a great many will single out the recent commission cuts by Marriott, Hilton and IHG as the issue that keeps them up at night.
The final full day of Meetings Today LIVE! MidAmerica, held in St. Louis May 20-23, 2018, may have featured an outing for an exclusive look at the soon-to-open museum of the Gateway Arch National Park—with the obligatory capsule ride to the summit—along with a spectacular lunch at The Ritz-Carlton, St. Louis, an Association Chat broadcast and a final-night reception at Flamingo Bowl, but planners interviewed during one-on-one sessions regularly pointed to commission cuts as the issue that is most vexing to their livelihood.
“For independent planners, that’s their bread and butter,” said Lisa Coon, procurement analyst with American Express GBT. “The times are changin’, that’s for sure.”
Christina Hake, chief solutions officer for independent planning firm Avery Murphy, echoed the comments of many that the recent commission cut move is roiling the industry.
“The cut in my commission, that’s No. 1,” she said, although she added that her company was well ahead of the curve in anticipating the move and is implementing strategies to navigate the new landscape. “The bigger thing is working with our clients. They’re looking at the bigger picture of the whole industry changing."
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Beth Knapp, events and conferences manager for QM Quality Matters, a nonprofit membership organization that primarily works in the higher education market, said that the relationships she’s forged with site selection contacts, and the impact it will have on their livelihoods, bothers her greatly.
“I use one of those folks that helps me with site selection and contracting, and we have a great relationship. It’s not easy to make up the 30 percent [of revenue they stand to lose],” she said, adding that she thought it was particularly unfair to cut the commissions of most independent planners while maintaining the traditional 10 percent rate for the “Favored Four,” HelmsBriscoe, ConferenceDirect, HPN Global and Maritz Global Events.
“Do it to everyone or do it for no one," Knapp said.
Most planners who were interviewed expressed a great degree of disappointment, but stressed that their reaction would be professional and entirely in the interest of their clients.
“It’s a big turnoff,” said Ivonka Knight, who owns her own planning company, IK Planning. “I don’t want to say we won’t recommend those properties, but we’re trying to come up with a solution.
It takes hours for site selection—it’s not a phone call and 30 minutes you’re done,” she added. “I’ve been fortunate that most of my contracts are locked until 2021, so I’ll cross that bridge when I come there.”
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Denise Adam, senior director, global accounts for HelmsBriscoe, said she is seeing more attractions starting to offer commissions to planners, such as theme parks and ballparks.
Scott Shellman, principal for Framework Meetings & Destinations, didn’t play down the effect the commission cuts will have on his business.
“The bulk of our business is via commissions,” he said. “We do site visits out of our own pockets and to have 30 percent of our revenue taken out of our paychecks from two companies is huge. If it’s ‘apples to apples’ Marriott and Hilton are going to lose our business, but ultimately it’s what our client needs.”
Shellman added that he thought a better solution, rather than the cuts, would be to offer a commission structure that would be higher for meeting planners who booked directly with the hotels, rather than going through companies such as Cvent.
Although commission cuts grabbed the spotlight, other concerns expressed by planners include some of the standard stressors, such as attrition, room block poaching, negotiating AV in a market where those services have been virtually monopolized by one company, communicating with stakeholders and board members, and the sheer terror of having to juggle so many responsibilities while keeping a steady eye on scheduling.
Final Meetings Today LIVE! Full-Day Highlights
Two major highlights of the final full day were a visit to see the final stages of the nearly $400 million renovation that is transforming the visitor experience at the Gateway Arch, the icon of St. Louis that celebrates the Westward Expansion, along with an hour-long broadcast with KiKi L’Italien of Association Chat, who is the headliner presenter at all of the Meetings Today LIVE! programs in 2018.
To catch the show, which featured interviews with some of the planners who attended the show along with Geoteaming’s John Chen, who ran the gamification operation and acted as the event’s videographer, click here.
And be sure to check out some additional images from Meetings Today LIVE! MidAmerica 2018 below. And don't miss our Meetings Today LIVE! MidAmerica 2018 event gallery, which was updated throughout.