by Loren G. Edelstein | March 22, 2018
The moment independent meeting planners have feared is coming sooner than expected. Hilton Worldwide will follow Marriott's lead in reducing commissions paid to third parties from 10 to 7 percent

Sources today told M&C that Hilton was poised to act, with an announcement tomorrow and the change to take effect Oct. 1. Hilton has confirmed those rumors to be true, and provided details to M&C.
 
Among planners who have railed against this development is David Bruce, who founded Meeting Planners Unite immediately following Marriott's announcement. Now 1,100 members strong, the group is poised to become a nonprofit association that will give independents a voice and collective buying power. Bruce, who also is managing director of Dallas-based CMP Meeting Services, called M&C on Thursday to discuss the news -- which he said had been leaked to him by several trustworthy sources -- that Hilton would follow suit. 

Following are highlights from that conversation.

What does this mean, initially, for independent planners?
This is the second sad day this year for the industry. It's going to make it far more difficult for independent planners to do business, and because of that they're going to have to decide to do something else, or find other revenue streams to make up the difference. 

Where do you see the potential for other revenue streams?
As an organization, Meeting Planners Unite is working with some A/V companies that are going to rebate a portion of the sale of their services to the third party. I also believe we will be working with other suppliers -- companies that normally are used to going through hotels -- to develop national contracts and have a commission system built into their rate structures, saving our clients thousands of dollars and helping to make up the difference in the loss of commissions from the hotels. Luckily, we were already working on these agreements, because we had already figured that this day would come ‑- we just didn't think it would be so soon.

Are you surprised about Hilton's timing of this move?
It's odd that they did it this quickly, although they set a date of Oct. 1 as the launch. I would expect them to make the decision on their own vs. being a puppet of Marriott's. I think they're following suit, not because it's the right thing to do, but because Marriott has done it. 

Do you expect others to announce the same move on Hilton's heels?
No, I do not believe that the smaller chains -- Hyatt, Omni, Fairmont, MGM, Caesars -- are going to follow suit in the same manner. They're going to wait this out and take advantage of it as an opportunity to gain market share.

What will Meeting Planners Unite do to help members remain profitable?

Our job moving forward will be to come up with revenue streams that help our third parties make up that 3 percent difference. That, in turn, will detract from the profits of a particular hotel. The hotels now get practically half of the in-house A/V charges, for example. Having those companies working directly with us is going to lower the profit level that a meeting will bring to a hotel. 

The fact of the matter is we're going to have to come up with new revenue streams that maximize the profit at every turn of the meeting. Services we did not concern ourselves with in the past as being profit-making areas -- transportation, A/V, rebates from convention bureaus -- those are going to be looked at more far more closely than ever before. For example, Tampa at one point was offering a $1 per-room-night rebate to the planner. An incentive like that gives us the opportunity to work with a super great bureau and to maximize our revenue by using that bureau. As we get farther into this situation, we're going to have to get more astute and look at every possible program out there for maximizing our revenue. 

Does it make sense, instead of trying to negotiate rebates with other suppliers, to charge clients a fee for your services? 
You have to remember what we're being paid for. We are getting paid a finder's fee for bringing a piece of business to a particular hotel. That's done in many different fields. We have the clients, and we bring their business to the hotels. Very rarely does a hotel company today prospect for new business. We are their prospectors. We are the ones who call businesses every single day, we call associations every single day, we call sports teams to ask if we can handle their site-selection services. The independent planner is the true salesperson for the hotel industry. 

We are absolutely going to be negotiating national agreements with every form of supplier. That's going to be our next big move.