It looks like what happened to travel agents 20 years ago is about to happen to meeting and event planners.
Marriott International will reduce the commission it pays meetings planners for U.S. and Canadian bookings to seven percent on Mar. 31, and planners should be worried about the hotel giant setting a precedent for the industry at large.
Marriott claims it will use the money it’s not paying out to planners and agents to improve its digital booking tools for the trade. That’s nice, but it won’t help those reliant on commission payments to pay employees and run their businesses.
Marriott is using its strength in the North American hotel market to discourage those who plan small meetings from holding events at Marriott properties; while small meetings are the most common type of meeting, they are also the lowest-yielding for hotels. Will Hilton, Wyndham, and InterContinental Hotels Group follow suit? Obviously. We just saw this happen with cancellation policies.
We’ll be tracking this shift in the months and years to come. Read below for everything else that happened in the meetings and events space this week.
— Andrew Sheivachman, Business Travel Editor
Commission Armageddon Threatens Planners
Marriott Commission Cut on Group Bookings Could Ripple Across Hotel Industry: Marriott will use its formidable presence in the North American hotel market to squeeze travel agents and meetings planners. The big question is whether competitors will follow suit. Could Marriott be setting the stage for a full-blown commission cut on all hotel bookings that would completely disrupt travel sellers?
Avoiding Marriott Is Impossible: One planner says no reputable meetings and events planner will book away from Marriott properties, regardless of the commission cut. Others say the romance is over.
Time for a New Business Model: If you rely on commissions as your primary source of revenue, you’re going to be in for a tough time, especially if other hotel giants follow Marriott’s lead.
The Future of Meetings and Events
Tales From the Crypto: The Wild World of Travel Blockchain Startups: Some entrepreneurs and scammers are treating initial coin offerings like get-rich-quick schemes, and the travel distribution ecosystem isn’t immune. Beware of people who say they can totally disrupt the travel industry, especially if they don’t even understand how the industry works.
Informa Is Ready to Buy UBM: The combined company would become the largest business-to-business event company in the world, and perhaps lead to a greater wave of consolidation in the sector.
Incentives Are Going High-Tech: Drop has hired Airbnb’s former director of engineering. It will be interesting to see how travel incentives evolve when powered by apps and gamification.
Skift Business Travel Editor Andrew Sheivachman [[email protected]] curates the Skift Meetings Innovation Report. Skift emails the newsletter every Wednesday.
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Photo credit: A promotional shot of a group of business travelers at the Bangkok Marriott. Commission cuts in North America could threaten the business models of many third-party planners. Marriott International