by Cheryl-Anne Sturken | February 05, 2018

The recent news that Marriott International will reduce its third-party group commissions from 10 percent to 7 percent at its North American properties effective  March 31, 2018, is still reverberating across the meetings industry. 

When reached for comment by M&C, Issa Jouaneh, senior vice president and general manager of New York City-based American Express Meetings & Events, a division of American Express Global Business Travel, spoke of how Marriott's decision affects his clients.
 
"We see this as a cost increase for our clients, as Marriott's decision increases net group program-management costs when the meeting takes place at one of their properties," said Jouaneh, whose division employs more than 1,400 certified meeting professionals with an annual buying power for 71,000 programs representing more than 5.9 million room nights. "We will continue to work with clients on a deeper understanding of cost structures, and the difference between chains and [individual] properties, and how this decision by Marriott can further affect such net program-management costs."

Clearly, American Express Meetings & Events did not see Marriott's new commission structure coming. Amex M&E's 2018 Global Meetings and Events Forecast, released Oct. 19 last year, was optimistic about growth opportunities for the meetings business in North America in 2018, despite budget constraints and forecasted boosts in advisory and incentive meetings in Canada equaling 20 percent of total meetings, while in the United States they would remain at 10 percent.

"Reflecting global sentiment, the key focus for meetings planners and owners will be prioritizing the attendee experience. Cost per attendee is expected to increase across most meeting types, and survey respondents indicate that investments will be dedicated to improving content and production, and boosting attendance numbers," said the report.

The company is now the latest to put its muscle behind the debate on how Marriott's commission restructuring will affect the hotel-buying decisions moving forward. "Meetings and events are strategic investments that corporations make, and as a trusted advisor for our clients, we are constantly evaluating new offerings and dynamic offers from the supplier community," added Jouaneh. "[We]  will continue to partner with suppliers that see value in our client's business."

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