The fallout from Marriott International's recent announcement that it plans to cut third-party planner commissions continues after the hotel giant pulled out of a Feb. 23 meeting to discuss that decision.
Successful Meetings spoke with David Bruce, an independent planner and founder of Meeting Planners Unite, which Bruce created to push back against Marriott's cutting commissions to 7 percent from 10 percent. Bruce is managing partner of CMP Meeting Services. Here's what he had to say.
Were you surprised by what happened?
Nothing surprises me any longer when it comes to Marriott. Gone are the days where Marriott's management style was to say "yes" before "no" and, "What can we do for you?" before, "What are you going to do for us?" Mr. Marriott and his wife built a company which was very relationship-oriented. Marriott now is 180 degrees from that.
What would you have said if the meeting took place?
Our goal from the beginning was to have an open and honest dialogue, listening more than speaking. We wanted to discuss the issues their one-sided approach will cause both our members and their clients. The damage will reverberate back through Marriott and with the franchisers who have Marriott properties under their umbrella; the owners of the properties who will undoubtedly see a reduction in group business; and all the way down to the Marriott employees who will service fewer group functions and thus have fewer hours on their schedules.
What is your reaction to the anti-trust scenario?
Our association will be a nonprofit corporation. It is undoubtedly possible for Marriott to work within this scope and offer our members a higher percentage on our business than someone who is not a member of our group, just as they have done for the four large [planning] companies that primarily use independent planners as their workforce. From my understanding of the IRS laws, an independent contractor can't be told what to do or how to do it, thus these independent contractors are actually working for themselves, just like the members of our group work for themselves. There is no anti-trust issue when discussing with a corporation the adverse effects of their self-serving policies.
How many members does your new organization have?
Currently, between the Facebook and LinkedIn sites, we are over 938 members. Out of that, we have over 300 independent company leaders who are all in unison with our goals. With approximately 60 percent of our members polled, this group has $175 million in annual Marriott business. I have never seen, in 43 years of being in the hotel business, a groundswell of support for an issue as I have with this one.
What are your plans moving forward?
We plan on completing the process of forming our corporation. We are developing our website and our infrastructure, and within the next 30-60 days, we will launch Meeting Planners Unite as a corporation/association which will work toward lobbying all of the hotel companies for the betterment of our membership. We will be working with different suppliers to offer our members better pricing on the items they need most, whether it is a registration portal, sourcing software, audiovisual company discounts, legal services, CPA services, and down the line, group medical plans. We will have a yearly conference dealing with issues of the day for these members, with a robust educational platform where these services will be discussed in detail. We will have a charitable function allowing our members to petition our committee for help when an emergency arises. Our committee will offer them either a loan for what they need, or a gift depending on the situation. This charity function is a significant item that I am most excited to have within our organization.
What is your reaction to those who say hotels shouldn't be underwriting a commission business model, that the system is flawed?
[CMP Meeting Services] was one of the very first companies that collected commission on a consistent basis some 32 years ago. The issue isn't whether or not commission should or shouldn't be paid, but why commission is paid. Hotels have all but eliminated the old-style sales prospector in their business model. Gone are the days where most salespeople were cold calling -- or "dialing for dollars" as we used to call it.
When I was in sales in the late 70s, we didn't have the sourcing components, the national sales offices, the hotel representation companies. For the most part we had to pound the streets and drum up business. Then with the advent of the independent planner, hotels started to cut back on the prospecting function and worked with these independents as if they were the new prospectors. Even today, the prospectors are the small businesses that are third-party planners, and the individuals under the "big four" umbrella. Marriott's business model is to have everyone work through their regional sales offices, which are manned by people who process, price, and respond to these opportunities when a lead comes in.
Those offices are not designed to shop for business. Instead, they are reactive. The third-party planner, or site selector in some cases, serves a significant role in this industry, and thus still represents significant assistance to both the clients and the hotelier. In many group hotels, 70 percent of the business produced comes through this method. I believe that if Marriott had its way it would completely automate bookings, eliminating, for the most part, all third-party planners and the internal sales teams that support them.