In a move that has sparked the ire of some meeting planners, but one that other suppliers will likely follow suit on, Marriott International has announced that it will centralize and automate the payment of commissions to group intermediaries (i.e., third-party or independent meeting planners) beginning next year.
Come June 1, planners will receive consolidated commission checks that reflect their business at any or all of more than 2,800 Marriott International hotels worldwide — including those in the Marriott, JW Marriott, and Renaissance brands, as well as those in the company's limited-service chains. Checks will be cut about 45 days after an event's end, rather than 30 days after the close of the master account, and where applicable will be payment for multiple meetings.
A hotline has been set up for this service, at (800) 445-1551.
To receive payment, Marriott is mandating that independent planners be registered with the International Airlines Travel Agent Network (IATAN) to collect their monies. Registration involves some annual fees, proof of legitimacy, and a requirement for liability insurance or a justifiable reason for exemption.
Marriott, which will cut costs and improve efficiency with the move, insists that IATAN registration is not difficult and will only benefit planners. But buyers are calling the new requirement onerous.
"With the explosion of growth of intermediaries, there's been inconsistency in the timing of payments, and customers have cited the need for centralization because of that," said David Marriott, senior vice president of global sales. Under the new system, he said, "We will be more consistent and accurate and will be able to provide more detailed statements."
While Marriott was clearly motivated on some level by customer demand, a money-wasting problem also sparked the move. Currently, individual properties handle commission payouts, but headquarters sometimes receives calls from those claiming they are due commission. Validating the claims has proven nearly impossible, so the company has paid out, often to those who are not legitimate event organizers, Marriott admitted.
The new system will likely eliminate that costly mistake, but some independent planners were outraged by the move.
"To come out with such a strict policy seems a little harsh," said Lynne McNamara of Meetings Plus in Avon, CT. "Does Marriott not value business from [third-party] meeting planners?"
Added Steve Collins of Resort Meeting Source in Breckenridge, CO, "Marriott is trying to dictate how I run my business. I do not need an IATAN membership [for any other reason] and, as small as the membership fee is right now, there is no guarantee that it will not go up significantly in the future," he said.
David Marriott claimed that other suppliers have publicly called for centralized commission payment. A Starwood official told
MeetingNews that the company will watch how Marriott's move plays out but "is not there yet" technology-wise to make a similar move. Hyatt and Hilton did not return calls for comment.
Buyers expect their outrage over Marriott's move to factor into their site-selection process, they said.
Theresa Garza of Amigo Meeting Solutions in Tucson, AZ, said, "If a Marriott is a finalist in the future, we'll include a clause that says our federal ID number is all that is necessary in order to process the commission. Since we have a federal ID number, there's no reason to sign up for the Marriott program. The company can't refuse to pay if it has signed an agreement to pay under our contract terms.
"This new process would make it less likely for me to recommend a Marriott to a client," she said, "because Marriott is making business difficult for its industry partners, who bring the company over 33 percent of its business."
Added Collins, "If the decision came down to a property that had this requirement and one that didn't but was otherwise equally appropriate for the client, I know which property would [win]."
Further, he said, "If it comes down to me not getting paid for a booking, I may have to stop representing Marriott properties in my proposals altogether. After all, I cannot afford to work for free.
"And in the wake of this move, Marriott best brace itself when tough times come around again," said Collins.
"This is not a smart move in the long run," he continued, "because when the economy turns around again, Marriott will be begging us for business."
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