by Loren G. Edelstein | February 01, 2018
The topic of third-party commissions was the "elephant in the room" at this week's Independent Planner Education Conference, a Northstar Meetings Group hosted-buyer event -- until today. Breakfast roundtable discussions broke the ice, with table cards such as "Hotel Commissions: WTF?" (for "What's the Future," of course), setting the stage for a lively exchange during the "Ask the Attorney" educational session, a Q&A with M&C legal columnist Jonathan T. Howe, Esq.
The meetings industry is in a state of "watchful waiting," said Howe, in reference to Marriott's decision to reduce third-party commissions from 10 to 7 percent. (Read M&C's related articles on this topic.) In addition to actions other hotel companies might take, the underlying question this action begs, he said, is "What is the value of your services?" Ultimately, a fee-based pricing structure might make sense for independent meeting professionals.
Among about 150 participants, including independent planners and suppliers, many questioned why the four biggest third-party firms are exempt from the reduction until their contracts expire. Those companies have been relatively quiet in comment, noted Howe. As to the duration of those contracts, it's likely that they might be in effect for 3 to 4 more years, he said.
While concerns about hotel commissions dominated the discussion, Howe raised another important topic that should be on planners' radars this year: the impending European Union General Data Protection Regulation (GDPR), which takes effect on May 25 of this year, as addressed recently by M&C contributor Kevin Iwamoto, who also detailed actions meeting planners should take to avoid stiff penalties.
Many common problems could be avoided if planners and hoteliers carefully read - and understood - their contracts before signing. Too often, that is not the case. Noted one planner, who previously was in hotel sales, "I can tell you, there's things we put in there that we hope you don't find."
"You know you're in trouble," said Howe, "when you ask the sales manager, 'What does this clause mean?' and he or she says, 'You're the first person to ask that question; I'll have to find out and get back to you.'"
For highlights of the discussion and more talk on commissions, view M&C's Facebook Live interview, which followed this morning's session.