Photo: ©Alan Light/Flickr Creative Commons license
Marriott International canceled a scheduled meeting Friday with the organizer of a meeting and event industry third-party planners group to discuss the hotelier’s decision to cut commissions by 30 percent.
David Bruce, managing partner of CMP Meeting Services LP, formed Meeting Planners Unite shortly after Marriott’s announcement in late January that it would be cutting commissions to third-party planners to 7 percent from 10 percent beginning in the second quarter of this year.
Bruce initially was going to have a conference call with Marriott officials Steve Heitzner, chief sales and marketing officer, and Tammy Routh, vice president of global sales, but instead was asked to travel to Marriott headquarters for the meeting. Bruce purchased an airline ticket and planned to meet Friday at Marriott’s Maryland headquarters.
Bruce said Friday he received an email from Heitzner on Thursday saying Marriott would only meet with him if he would talk just about his company and not as a representative of Meeting Planners Unite. Bruce would not agree to that and “Marriott called off the meeting,” he said.
“The whole process of going there was to open a dialogue and listen to them about why they’ve done what they’ve done and have them listen to me as to the effect this has had on third-party planners,” Bruce said. “If anything good has come from this whole Marriott thing it’s that independent planners have started to talk with each other and work together on common issues.”
A Marriott International spokesperson said Friday that Marriott “places a priority on maintaining and strengthening its relationships with stakeholders. However, antitrust laws restrict the types of information that can be freely shared among competitors including through validly formed associations. Marriott will not discuss with anyone the financial terms on which it does or will do business with that person’s competitors.”
More than 900 people, including 300 organizations and planning groups with more than $175 million worth of Marriott business, have joined Meeting Planners Unite, Bruce said.
Marriott caused an uproar among third-party planners in late January when it announced it would cut commissions paid to third-party meeting planners to 7 percent from 10 percent at all of its properties in the U.S. and Canada. Routh’s letter said that while “group intermediaries play an important role in the marketplace, costs for our North American hotels and owners are growing at a faster pace than group revenue, which impacts hotel profitability.”
“At Marriott International, meetings and events represent a critical part of our business as well as an opportunity to drive innovation and win with customers,” the statement said. “The current business model and environment, however, present significant obstacles to making the investments needed to deliver a world-class experience for customers.”
Marriott is the largest hotel company in the world following its September 2016 merger with Starwood Hotels & Resorts. Marriott now comprises 30 brands and more than 5,700 properties globally.
There was significant pushback from third-party planners, and in the aftermath Bruce and Jeff Berger, president and CEO of Conference Planning Resources near Chicago, joined to create Meeting Planners Unite. They are planning to register as a not-for-profit association.
“To me, this is very short sighted,” Bruce said. “Marriott has had one of the best years in their history, their revenue numbers are higher than ever before, and now they’re saying they can’t afford to pay third-party planners for their work. That’s why we wanted to have this meeting, not to have a shouting match, not us versus them, but a discussion on why they are doing what they’re doing, to listen to what we’re saying and come up with a solution that makes sense.”
Bruce said nearly 80 percent of Meeting Planners Unite are women-owned businesses. “For some of us, a 30 percent hit is a huge undertaking,” he said.
He added he had had discussions with other hotel groups, who have told him they are “taking a wait and see attitude” while some independent hotels are raising the amount of commission paid.
“Our position is that we are your partner, not your enemy,” he said, “but this is not good for our industry.”
Marriott earlier this week shared a report from Business Travel News that included comments from Marriott global officer of digital, distribution, revenue management and global sales Brian King, saying the change is a "reset and rethink" moment for the company.
“We’ve been looking at the demand that we’re receiving from our customers and the amount of innovation that needs to take place in the group space from an end-user perspective, and then we’ve also been watching the pace of revenue grown and the pace of commissions, and they’re just not commensurate with each other.”
King said in the report that Marriott has been investing to improve groups and meetings, such as its online meetings training program, Meetings Excellence, as well as its centralized group commissions and group intermediary website, which launched in 2008.
