Last week, when Hilton followed Marriott's move to reduce third-party commissions, "I wasn't even remotely surprised," said Bonni Scepkowski, president and chief strategy officer for Stellar Meetings & Events in Washington, N.J. "I expected them to do this as quickly as they could."
Scepkowski has spent decades in the business, first on the travel-agency side, then as a corporate planner for med/pharma, biotech and telecommunications firms, before launching her independent planning business in 2000. Here's what she told M&C about the changes hitting the industry this year.
Do you expect commissions to go lower than 7 percent?
Yes, absolutely - and not in increments. I expect it to go from 7 to zero. They'll couch it in savings to the end-user, for our clients. The story has always been that the hotels didn't charge more for commissionable rates, but that story is going to change. They'll say, "Now that we don't pay third-party commissions, we don't have to pass that cost on to you."
I haven't heard anything of anybody else jumping soon. I think Hyatt and Intercontinental Hotels Group will take a little longer, to try to take advantage of what is perceived to be the switch of business. We're getting a lot of emails from independent hotels and small chains offering higher commissions and taking advantage of the negative press.
Will they be able to move market share by offering higher commissions?
I don't see that working for anyone who works ethically. No one ethical is going to not recommend Marriott because they're not paying us [as much] money. We can't do that disservice to our clients.
What will this mean to your business model?
I don't make my living on commission. I'm fee-based, but my clients know I'm charging them less because we're getting the commission from the hotel. I have to have the conversation with them that I'm going to have to change my fees. That revenue is going to have to come from somewhere.
I haven't been able to come up with the way that conversation is going to go. There's a certain talent to saying to a client, "Someone else isn't paying me now so you have to." I've made the decision not to press that right now. I've just had the conversation that this is happening.
Do you feel offended by this development?
I started in this industry a very long time ago. Everything I have done has been based on relationships and partnerships. I try to treat my hotels as a client. I give when I can give; I don't over-negotiate; I recognize the value they are bringing. For 30 years, I've been building and showing respect and treating my vendors as partners. And Marriott and Hilton just showed me that they aren't my partners. It's saddening. I've been telling everyone forever: Treat people with respect, don't treat hotels as an enemy. What a disappointment to find out that I really was alone in that partnership.
We've always been able to say we have these relationships with these hotels, and we can get better prices and concessions. Marriott and Hilton have just said that relationship isn't as important to them.
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