Hyatt Corporation today confirmed to Smart Meetings that stories flying through the meeting planner world are true—the company will reduce commissions to third-party planners early next year.
The following was received from a Hyatt spokesperson.
Hyatt will be reducing commissions for third parties booking group business at hotels in the U.S. to seven percent, effective February 1, 2019. We did not arrive at this decision easily—after careful evaluation, this change ensures our commissions structure meets the needs of our constituents, remains competitive in the market and is in line with the industry as whole. Intermediaries are important partners for Hyatt and we understand the value they bring to our organization as well as to their customers. We remain committed to closely collaborating with meeting planners and travel agents to deliver meaningful experiences and foster shared success.
This change will not affect business booked prior to February 1, 2019, even if the event occurs after that date.
The move brings Hyatt in line with a similar action announced by Marriott International in January, and subsequently followed by Hilton Hotels & Resorts and InterContinental Hotels Group.
Predictably, planner reaction was swift. Amid outcrys and outrage, Rich Heitke, CMP, CGMP, senior event planner at EzEvents, noted that if Hyatt and the other big chains “drive independent and professional planners the way of the travel agent and the dodo bird,” they stand to reap more than the 3 percent commission they no longer pay out. “Their increased profits will come from not having to negotiate pricing or terms with a professional planner sitting across the table, advocating for their clients’ legal and financial interests and rooting out the devils lurking in the details,” he said.
“Independent planners with business models diversified beyond commission-based sourcing may continue to do well,” Heitke continued, “but they also have to know how to demonstrate their value to their clients.”
Paul Van Deventer, president and CEO of Meeting Professionals International (MPI), issued this statement:
“MPI remains committed to our community of professionals who have been directly and indirectly impacted by decisions regarding commission reductions like this, including nearly 3,000 third-party planners, the global hotel brands and numerous Destination Marketing Organizations. In response to the reductions that started in early 2018, we developed the Independent and Small Business community, along with specific education and networking opportunities, to assist with career advancement and business growth.
“We will continue to support and provide resources to third-party organizations, an integral part of the live events industry value chain. Throughout our more than 40 years and long into the future, MPI will continue to serve as the industry leader in providing resources that empower our community to change the world.”