Events Industry Adapts 1 Year After Marriott Commission Cuts

By Joe Bush, January 24, 2019

It’s been a year since Marriott decided to lower the rate it pays housing companies for business they bring to its properties.

How’s that working out for everyone?

One of the fears last January when Marriott decreased the commission rate from 10 to 7 percent was that other companies would follow, and that has indeed happened. InterContinental Hotels Group, Hyatt and Hilton have either already mimicked Marriott or will by February 2019. All are publicly traded.

Brett J. Sterenson, president of Hotel Lobbyists, says Marriott was likely pleased with the copycatting.

“In truth, the day Hilton announced they’d follow suit, Marriott was almost entirely let off the hook,” he says. “And IHG’s announcement sealed it.  At least in the short term, Marriott is probably very pleased with their decision.”

Marriott did not respond to repeated requests for comment for this story but did comment last year.

Hilton was most forthcoming of the three most recent companies to drop the rate, but didn’t stray too far from the others in saying basically that business is business especially for public companies.

“We recognize the important and integral role group intermediaries play in the events business, and we are proud to partner with a wide network of travel professionals to create meaningful experiences for our guests,” says Frank Passanante, senior vice president of Hilton Worldwide Sales. “At the same time, we also have to balance the needs of all parties, and continually review our sales and distribution strategies to ensure we are offering the best value for our customers, hotels and owners.

“From a client point of view, they understand the reasons for this change and recognize our commitment to continue working with them to ensure all guests have the best experience possible. We are in regular discussions with our customers, hotels and owners and do understand the various perspectives. We have the utmost respect for our third-party partners and look forward to continuing working with them to create the best experience for our guests.”

The New Reality

The clients in this scenario had much more, though less polished, comment.

Jeff Lukasak, founder and president of PSE Event Housing, chose a practical view of the forced adaptation.

“The reason is because they could—they have the leverage,” he says. ” The housing companies will just have to figure it out, whether it’s being more efficient internally to save costs, and in time reduce headcount.

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