NOTE: The following is only the perspective of author without representation or endorsement by any organization. It is also based on several conversations held with industry leaders over the past 24 hours.
Marriott leaders’, with the decision to cut commissions from 10% to 7%, squander our flexibility and power to influence our organizations towards efficient Strategic Meetings Management (SMM) programs. Worse, when Marriott chooses to show preferentialism toward four (4) sourcing agencies that are exempt from this commission reduction, the inequality results in an industry uproar with obvious imbalance.
All of my SMM colleagues are scrambling, putting together revised cost/benefit analyses on their meetings programs that had previously been funded by commissions, now wondering where the money will come from for their headcount and technologies. If Marriott was planning to cut commissions, it should have provided the industry with at least a nine to twelve month warning so that organizations could revise budgets, renegotiate with their agencies, reevaluate their resourcing and technology requirements, and most important reconsider WHICH chains are in their preferred hotel program.
Maybe the mammoth egos at Marriott don’t realize that the SMMs take the cost of the program, subtract commissions returned, and then charge back meeting owners (or divisions) based on the complexity and category of their meeting. Or, maybe Marriot leaders don’t know how hard it is for most organizations to buy into SMM as a way to drive business to its properties through preferred hotel programs, reduce contractual and operational risk, adhere to GDPR, and provide a strategy for this multi-billion dollar spend category. Worse, commission collection rates aren’t 100% in most cases so now there will be less commissions with less than optimal collection of that money.
Further inequity, in this insensitive decision, is the decision by Marriott to exclude four (4) sourcing organizations from the reduction from 10% to 7% commissions. Marriott has elected to temporarily continue to give 10% to these four agencies without transparency as to why, how long this exception will be granted, or how other agencies can be part of the pedestaled group. Thousands of agencies that are not part of Marriott’s elite are hosting calls with their clients to enlighten them on the situation. Strategic Meetings Management programs are at risk with these decisions.
With this power trip on steroids action, chaos is turning into a quest for alternatives. In my talks with colleagues, many are looking for alternatives to Marriott. Meeting leaders are scrambling for sourcing options such as redirecting bookings to other hotel chains and even looking for alternative options such as AirBNB and VRBO for small meetings. In talking with one of my professional service industry colleagues yesterday, she told me that one of their small groups stayed at an AirBNB for 20 people last week in San Francisco. Why not? Small meetings are the largest volume for most organizations and it is time to seek other options rather than traditional venues especially with this latest hotel industry decision.
This doesn’t surprise me as my husband and I recently renovated a house for AirBNB and I am getting group bookings every weekend such as retreats, bridal parties, sporting teams, etc. I’d be happy to return 10% commissions for nights booked…sounds like we need Agencies and AirBNB to come to the table with us owners to support the meetings leaders who still need those commissions to support their SMM Program. Industry leaders – let’s discuss our options and ideas. Contact me at [email protected] or through LinkedIn .