Properties and Destinations Respond to Marriott Decision

Hospitality organizations offer support to planners in the face of commission cuts

Niagara commission cut

With many planners disgruntled by Marriott International's decision to cut third-party commissions, some destinations and properties are stepping up to show their support for planners. The reduction in commissions to planners and other intermediaries from 10 percent to 7 percent for hotels in the U.S. and Canada, has led to an outcry throughout the industry, and the launch of planner-driven petitions and social media groups to protest the decision. 

But not only are planners supporting each other, companies within the industry are backing them as well. Preferred Hotels & Resorts is showing its support by launching a 90-day promotion, which will provide clients with 150,000 I Prefer Reward Points and an additional 1 percent commission bringing the total to 11 percent, for any programs that exceed $100,000 in rooms revenue and have the contract close by July 31. RFPs must be received by April 30. This will be available to clients booking programs at participating hotels across the U.S., Canada, and Europe. 

"In addition to offering this limited-time promotion, we will always maintain our standard 10 percent commission level," says Elaine Macy, executive vice president, global group sales of Preferred Hotels & Resorts. She adds this may allow Preferred to attract business it never had the opportunity to bid on before, help planners get to know Preferred Hotels & Resorts as a brand, and develop long-term relationships with clients.

SPIN: Senior Planners Industry Network, the association for senior-level planners has created a petition on the homepage of its website asking Marriott for commission parity for all intermediaries. At press time, 250 had signed the petition and the number is quickly growing, says Suckow.

"The silence is deafening of the bigger, stronger associations that have Marriotts in their ranks. We don't have that conflict of interest and we are standing up for those small third-party companies," says Shawna Suckow, CMP, founder of    SPIN. "The first notice was like a stab from a knife. Then to find out there are exemptions to the policy, that was twisting the knife."

Suppliers who stand by the meeting-planning community will "have a windfall," says Suckow. 

She points to Destination Niagara, the official destination marketing organization for Niagara County, as an example. The organization has created a promotion that lets intermediaries and third parties know what an integral part of the process they are. "In Niagara Falls USA, we value our third-party relationships today, tomorrow and every day. That's why we're offering incentives especially for third party planners," it says.

"We are doubling down our support to these third parties as we recognize the value they bring into the mix," says Lori White, director of convention and meeting sales, Destination Niagara USA, Niagara Falls USA. "Some of my most rewarding pieces of businesses have come from third parties. Anything we can do as a DMO to bridge the gap, we will do."

"Marriott is shifting the cost to the planner, who will then shift the cost to the client as these small companies can't absorb this cut," says Suckow. "To get the full 10 percent, some planners will look outside the U.S., a blow the U.S. economy. If a corporation can just as easily get a discount to go to Mexico that's where they will look."

Take Cancun, a three-and-a-half-hour flight from New York City, and a destination with all the elements in place to service meeting and incentive groups. The Marriott Cancun Resort and JW Marriott Cancun Resort & Spa, sister properties, will benefit from Marriott's commission-cutting move, say some industry insiders.

Andy Ortiz, president of Global Incentive Management DMC and past president, MPI Mexico Chapter, agrees that this move will help Marriott hotels in Mexico but doesn't think the policy will stay intact. "This is going to crash and burn," says Ortiz. "I give it a year at most." 

The fact that this goes into effect after the passage of President Donald Trump's corporate tax cut is an added insult, says Ortiz. "They are saving 14 percent on government tax and on top of that are now taking away three percent from meeting planners who brought them millions and millions of dollars over the years," he says. "Total greed." 

Many independent meeting planners, especially those who rely solely on commissions for their livelihood, are not taking Marriott's move to reduce commissions on group bookings lightly. 

David Bruce,  managing partner of CMP Meeting Services, launched Meeting Planners Unite, a LinkedIn group with a corresponding Facebook page. More than 500 signed up across the two sites in the four days following the announcement, with a stated goal of reaching 5,000 members by the end of February. At that point, the amount of revenue the members as a whole generates will be calculated and presented to Marriott.

As one of the first third-party planners to be paid by the 10 percent commission in 1986, Bruce felt it necessary to spearhead this effort. 

"This move by Marriott costs us money. I will lose 10 percent for every dollar spent at Marriott at meetings we have to be onsite for," explains Bruce. "I will not lower our reps' commission. We will take the hit."

In addition to Meeting Planners Unite, he also plans to avoid Marriott's national sales office when planning meetings and to no longer attend Marriott's Travel Partners conference, aimed at the third-party market. 

"If there is anything positive to come out of this, it is that there is more dialogue going on between owners of businesses across America, more than ever before in the industry," says Bruce.

He adds that destinations like Aruba and the Dominican Republic will prosper as a result of this situation. Does he foresee other hotel companies cutting commissions as well? "That is the billion-dollar question," says Bruce. "I believe most are taking a wait-and-see attitude at this point. They are seeing the backlash Marriott is experiencing and more that will follow and may decide not to follow the pied piper down the road to ruin. I am hoping the Hiltons, Hyatts, and Omnis will see the value of having a product differentiator against the largest meetings hotel chain in the industry."