Events Industry Adapts 1 Year After Marriott Commission Cuts

By Joe Bush, January 24, 2019

Going Extinct?

Sterenson explains how he’s adapted and how the changes have affected his business.

“I haven’t changed a thing about the way I operate due to commission reductions. I haven’t burned bridges; I haven’t barked up any flagpoles; I haven’t ruffled any feathers,” he says. “I was prepared for it, I redoubled my efforts to grow my business as it was happening, and were I not to have a 5-year old and 3-year old at home, I might truly be sleeping better at night as a result.”

Sterenson says he made a concerted effort to increase overall group volume, and had he not done so, he thinks he would have felt a hit, particularly because his group make-up is mostly short term.

“While many third parties are booking well into the 2020s, my groups are booked and consumed within the same calendar year,” he says. “I’ve seen plenty of 7 percent commission checks so far. They’re pretty obvious, too—they don’t end in whole dollars.”

Shawna Suckow, founder and chairman of SPIN: Senior Planners Industry Network, says she doesn’t think the reductions are one-offs.

“Just like airlines continued to reduce commissions over time, so will the hotels,” she says. “What’s scary is that there are very few travel agents around these days. I believe we’ll see a sizeable decrease in the number of independent planners and procurement specialists.

“Those who will survive are the ones who are savvy enough to recoup lost income by proving their value and justifying increased compensation to the corporations who hire them. The only saving grace, ironically, might be the next recession. As hotels get desperate (again) for business, will they increase commissions? Time will tell.”

Sterenson has his own thoughts on the future.

“I hesitate to predict the direction of commissions—I’d rather not fuel any self-fulfilling prophecies,” he says. “But suffice it to say that I’m not concerned that third parties are being made extinct.”

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