As anyone knows who works in the event industry, in January Marriott International announced a 30 per cent reduction in commissions paid to intermediaries for bookings at all hotels in the United States and Canada. The announcement was accompanied by the news that four large partners would be exempt from the reduction until their current agreements with Marriott expire.
No surprise that this reduction in commissions sparked heated discussions in our community, the creation of petitions demanding a return to the 10 per cent level of commissions, and calls for a boycott of Marriott International hotels in North America.
Marriott justified the announcement by saying that their distribution cost for group bookings was increasing faster than its group revenue. This may well be true, and Marriott is large enough to impose its will on its customer base without too much concern.
I have written several Industry Insider blogs over the past seven or eight years about pricing and value. Many of you know I am a firm believer in open book pricing and telling clients exactly what your services are worth and the cost. I think you need to clearly define what your fees are, what the cost of doing business will be for your clients, and how you think you can help the clients achieve their objectives.
I also believe that if our industry fails to explain its value to our clients (whether external or internal), it is doomed to compete on an ever-declining pricing and profitability model. By value I mean how using your services results in better supplier costs, reduced liability, better concessions, improved event messaging, more results-oriented planning and better post-event business results for the event champions.
Obviously in our business, logistical mastery is required to plan flawless incentives and meetings. Effective communication skills are almost equally important. The planners need to be able to articulate the goals of the event they are organizing to ensure all partners are aligned. The suppliers need to ask what the planner is trying to achieve to make the best suggestions. It amazes me how many supplier proposals I receive where it is obvious the hotel or DMC has not even bothered to consider who the end customer is and how their venue or service would help support the client’s objectives more than their competitors in the marketplace.
As an industry, we spend a lot of effort trying to prove the value of meetings and incentives to government and the general public. We talk about the jobs that are supported, the tax revenue that is generated for destinations, and the value of face-to-face communications. There are several large industry alliances – the Events Industry Council and the Meetings Mean Business coalition are just two of the better known – who do this effectively.
In my opinion, all of this effort is wasted unless we as an industry truly believe we provide our event clients with real value and stop trying to deliver meetings and incentives at the lowest possible prices.
– Les Selby is the director of Meetings & Events for One10 Canada. He has been a corporate, independent, and third party event professional for over 27 years. Les has earned both his Certified Meeting Professional (CMP) designation and his Global Certification in Meeting Management (CMM). Inducted into Meeting + Incentive Travel Magazine’s Industry Hall of Fame in 2009, he is an active member of Meeting Professionals International (MPI). He served on the Toronto chapter’s Board, was the 2000-2001 chapter president, and is currently a member of the MPI Foundation Canadian Council. In 1997, Les was recognized as Planner of the Year by the MPI Toronto chapter, and received the President’s Award for 2009. He can be reached at les.selby@One10Marketing.com.