Get ready to hear more about commission cuts, gender inequality and human trafficking. Quite frankly, we should be talking more about these issues because each topic is of vital importance to our industry.
The Business Research Panel, a group of MPI members dedicated to giving insight into the latest issues and trends, weighed in on these topics and more in the Winter Edition of Meetings Outlook, our signature quarterly research report developed in partnership with MGM Resorts International.
Let’s start with those commission cuts, a story that erupted in 2018 and ranked as the most-read topic by our readers.
It all started in January of 2018, when Marriott International announced it would cut commissions to independent and third-party meeting planners from 10 percent to 7 percent. Hyatt, Hilton Hotels and InterContinental Hotels Group all followed suit by year’s end, and this topic is showing signs that it is not going away.
The latest Meetings Outlook report shows that among meeting planners, 24 percent have already been hit with commission reductions by some hotel companies, while an additional 28 percent expect to be affected in the coming year, the survey found.
“For me as a third party, the most significant trend is that I am literally losing 30 percent of my income (this) year,” a respondent said in the survey. “So, I either have to work 30 percent more or find more new clients so I can pay my bills. With all of these mergers and acquisitions and companies are making record sales—you think they wouldn't be trying to damage their partnerships.”
But it’s not only the planners who are dealing with the impact. Hotel personnel reported they are feeling their own pressures, too. One respondent who works at a resort said the current seller’s market has not been seen at their company’s sister urban properties. “I find planners ask for many more concessions than in the past,” the respondent said. “We have had to hold strong with rates and concessions though we may not gain the business. Once you drop to a lower rate, it takes years to reâestablish.”
Our reports states 86 percent of planners affected by commission cuts are changing their business models to adapt. As Meetings Outlook predicted last quarter, there is a move by planners who have experienced reduced commissions to avoid hotels that have lowered commissions. The most prevalent coping strategy, used by 57 percent, is avoiding hotels that have reduced commissions, followed by negotiating more commissions back into their agreements with hotels, deployed by 43 percent.
The independents are an integral part of the professional planner landscape. MPI last year launched a new initiative for this group, which numbers about 3,000 of our membership. The MPI Academy, for example, has increased its focus on education for this important group. Visit mpi.org/academy to learn more.
The commission cuts story is not going away, and we’ll continue to follow this topic in the pages of your member magazine.
Be sure to read MPI President and CEO Paul Van Deventer’s column, as he speaks to our coverage of women in the industry and our industry’s efforts to battle human trafficking.
Some hefty topics for sure, but all vitally important for our industry. Spend some time with Meetings Outlook and share your thoughts at editor@mpiweb.org.
Until next time …
Rich Luna
Editor in Chief
rluna@mpiweb.org
