Why hotels cutting commissions is good for the Meetings and Events Industry
I know this isn't going to start as a popular opinion, but I am in favor of the commission cuts from Marriott, Hilton, and IHG. While it has been mostly executed rather poorly, they are doing it slow enough that we as an industry have plenty of opportunities to evolve and not just survive, but thrive! Here is why I feel that this will have a huge positive impact on our industry.
It will elevate our role within the C-Suite.
A lot of site selection services bill themselves as a "free" service. Every time I have been pitched I always ask, "how are you free? Are you commission based?" I always get a reluctant, "Welllll, yes." I have also been to countless industry events where senior and tenured Meeting and Event Professionals complain about EA's or other admins competing for their job. While that is a much larger discussion, this is a part of it. These "free" agencies target those admins and enable them to seemingly perform miracles by executing a site selection and planning a meeting while they are still doing their real full time job. Think about if these "free" services went away. The executive asks his admin to find a hotel for 20 people for a meeting. The admin replies with, "Great, I need $5k." or "Great, I'm not going to be able to do blank, blank, and blank, because I need to research, contact, and review the RFP responses." How do you think that executive will react? Most likely a "What!? But, that you used to do that all the time for free." After a few times of spending some money or losing their admins time, the site selection process now starts having real value in that Executives eyes. Since it is now hitting their bottom line, their thinking shift from "oh this is just an ancillary task, anyone can add to their plate" to "maybe we should hire someone for this" be it that admin moving into a full time planning role or opening headcount to hire a full time planner.
Ethical Implications.
When we as third parties negotiate on our clients behalf, our judgement can be clouded if our revenue is tied to the rate they pay. We may end up paying more attention to the clients with a block at a Ritz Carlton instead of at a Fairfield Inn. If we don't make a dime off what rate they pay, then doesn't the client and the program truly win?
I would love to see our industry STOP the complaining and the whining and realize this isn't going to go away any time soon. Now is the time to pivot in our industry and future proof ourselves. Now is the time to have conversations about revisiting our business models and saying so long to the ways of yesteryear.