Meeting News - July 7, 2008 - (Page 27)

Live from the Forum @ MeetingNews.com TOPIC: Commissionable vs. non-commissionable room rates was told by a salesperson in Hawaii that it is illegal to increase room rates based on whether the purchaser wanted commissionable or non-commissionable. I just came across a company that did—very disappointing—and should other groups of mine want to use this destination, I will not recommend this property. I will now have to refund the commission to my clients since I promised them that room rates will not increase when using my services. Any idea in the legality of this matter? Any idea why some hotels don’t see us as an extension of their sales forces/customers? I Do you have a burning question to ask your peers? Log on to the MeetingNews Forum to get answers fast. meetingnews.com/forum Mark Kustwan, Owner, OnTheMark, East Longmeadow, MA I don’t know if it is illegal to increase rates to accommodate a commission, but I doubt it as long as it is disclosed. I have never worked with a hotel that has increased rates to include a commission. When I do work on a commission, I make sure that the contract includes a clause stating that the rates have not been increased to accommodate the commission and that a non-commissionable rate would be the same as the commissionable rate. This makes it very clear to clients that they are not paying the commission via increased room rates. Laura Shelton, President, Fusion Meetings & Events LLC, Alexandria, VA I don’t believe it is illegal for a hotel to increase room rates to accommodate a commission, but it has now become pretty uncommon. In my RFPs, I have the hotels sign a clause stating that the rate is commissionable and that the rate has not been increased to accommodate the commission. That way, they have to sign it and agree to that before they can even bid on the business. Steve Collins, Resort Meeting Source LLC, Breckenridge, CO For groups, the hotels do factor commission into the rate as a cost of doing business. Most hotel companies are moving to a proﬁt-based yield model, versus a revenue model. Thus the proﬁt margins on F&B, AV, rooms, and sometimes other revenue streams, are factored in. So are costs and loyalty programs (transient has a higher cost than group). The end result is that, since every group is priced separately, based upon the time of year and the group yield system, you never know the rate increase—and they probably won’t tell you. I believe there is probably a 2percent price inﬂation for commissionable groups vs. non commissionable. This is based upon my hotel-industry experience. My layman example is, if you are going to sell your house for $250K, and it was easy to sell it yourself versus using an agent, you would still list the price at $250,000 and not for $235,000 net. However, you may be more negotiable in lower-cost items if no agent was involved. The market drives the price. As meeting planners, we leverage the market, but commission is a factor. Mike Beardsley, CEO, Inn Fluent, Ashburn, VA Thanks for your input. This has happened to me on a couple of occasions. The way I ﬁnd out is when the hotel does not put in my “no increase in rates due to them being commissionable” clause. I can’t ethically make my clients pay more since they are paying me a management fee. I try not to bring the property the business (or additional business in the future). Mark Kustwan TOPIC: Attendees wearing badge holders sponsored by a competitor? A colleague e-mailed me from on site: “One of the exhibiting companies refuses to wear the badge holder sponsored by a competitor. What do you suggest? Joan Eisenstodt, Owner, Eisenstodt Associates LLC We never use sponsored badge holders—only lanyards. That way, participants can skip the lanyard without compromising the color-coded badge holders. Tony Maiorino, Senior Director of Expositions and Meetings, Scherago International, Jersey City, NJ We sell lanyards with boldly printed logos as as an exclusive sponsorship for one of our events. Providing an alternate lanyard (even blank) would rufﬂe the feathers of our sponsor and may be in violation of the sponsorship agreement. While I would discreetly turn a blind eye if some attendees don’t wear the sponsored badge holders, I don’t think I’d supply alternates. Karen Brown, Managing Partner, Conferences by Design, Salisbury, MD We had this a few years ago and quietly supplied competitors with our association badge holders. Our sponsor was not upset. It was only a few, but there was no sense making anyone unhappy, and security was not compromised. Sheryl D’Amico, Senior Project Manager, Professional Development Group, American Bankers Association, Washington, DC By all means, exhibitors should not have to wear badges sponsored by a competitor. We typically provide plain badge holders for exhibitors as even if they are not direct competitors to the sponsor, most do not want to wear a badge with another company’s logo on it. Lisa Mikita, Assistant Director of Conferences & Meetings, Association of Legal Administrators, Lincolnshire, IL MEETING NEWS (ISSN 0145-630X, USPS No.356-010, July 7 2008, Vol. 32, No. 12 is published semi-monthly except for June, August and December, which is monthly, by Nielsen Business Media, 770 Broadway, New York, NY 100039595, tel. 646-654-5000. Subscriptions are offered free of charge to individuals actively engaged in planning meetings or conventions in the U.S. and Canada. The cost of a subscription to non-qualiﬁed subscribers is $79 in the U.S. and $95 in Canada (Canada Post Publications Mail Agreement No. 40031729). The cost of a foreign subscription, payable in U.S. dollars, is $195. Periodicals postage paid at New York, NY and additional mailing ofﬁces. MeetingNews is a trademark owned exclusively by Nielsen Business Media. Copyright © 2008 by Nielsen Business Media Inc. All rights reserved. Reproduction of this magazine, in whole or in part, is prohibited unless authorized by the publisher. For address changes (please include mailing label), single copy sales ($10 per issue including shipping and handling, prepayment required), subscription information, and other customer service inquiries, write to MEETING NEWS, P.O. Box 1189, Skokie, IL 60076-8189 or call 847-763-9050. Printed in the USA. POSTMASTER: Send changes of address to MEETING NEWS, P.O. Box 1189, Skokie, IL 60076-8189. www.meetingnews.com July 7, 2008 MeetingNews 27 http://groups.google.com/group/MiForum http://meetingnews.com/forum http://www.meetingnews.com

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