Third-Party Event-Planning Firms Want You

The meetings and site-selection powerhouses came into 2022 with plenty of business and jobs to fill.

Brian-Stevens-ConferenceDirect-CEO
Brian Stevens, CEO of ConferenceDirect, at Meeting Professionals International's World Education Congress in June. He guided his company through the Covid storm to better days. Photo Credit: Soliman Productions

When Covid hit in early 2020, and the bottom fell out of the meetings business, Mike Rowan, an independent associate for Maritz Global Events, wondered what was going to happen to his business, his income, his livelihood.

Mike Rowan of Maritz Global Events
Mike Rowan of Maritz Global Events

“It was a very anxious time, not knowing the extent of what we were dealing with and how long it would take to come out of it,” he says. “I ate a lot of revenue that, in some cases, I had been prepaid for and I had to repay.” To stay afloat, Rowan was able to borrow Paycheck Protection Program funds from the Small Business Administration, “which I might be paying off for the next 20 years.”

Of course, everyone in the meetings industry was hit hard when “our business was basically outlawed,” says David Peckinpaugh, then the head of Maritz Global Events; he became president and CEO of the overall company, Maritz Holdings, on Jan. 1. But it was a particularly awful time for associates of third-party planning firms like his, doing site-selection research and bookings on commission, when their incomes dropped to worse than nothing, as they had to return money that hotels had already paid them for events that never went forward.

The good news in 2022 is that Maritz and its compatriots, such as American Express Meetings and Events, Conference­Direct, HelmsBriscoe, and HPN Global — and their independent associates — have bounced back with a vengeance, recording not just improved business, but a first and second quarter that met or surpassed their best-ever numbers. And, like every other company out there, they are working hard to staff back up, filling positions that have been dormant the past two years.

“We’ve been extremely strong the entire spring and this continues through the summer and fall,” says Peckinpaugh. “We are anticipating fiscal-year 2019 levels by the end of this fiscal year [in April 2023].” 

Surviving 2020

In the trenches, the independent planner landscape has changed significantly over the past two-plus years. A number of third-party associates broke ties with the parent companies — either by choice or by force — and went independent. One such planner, who requested anonymity, told Meetings & Conventions it was a change for the better, especially financially, with no need to share the income generated. 

On the other hand, some veteran third-party planners left the business altogether, taking their expertise to other realms. Meanwhile, those left standing had to handle the immediate and changing needs of current clients.

Mandi Graziano HPN Global
Mandi Graziano, vice president of global accounts for HPN Global

“The first couple of months, I was busy lifting and shifting, and just trying to make things right between hotels and customers,” says Mandi Graziano, vice president of global accounts for HPN Global. “Then, after my godmother had passed away, my backyard completely flooded, and I was in the middle of a thick negotiation with a hotel that just wasn’t getting it, I had a talk with myself: You can put your head in the sand and complain about this and endure this pain, or you can become a student of the crisis and arm yourself with as much information as you can.”

Graziano started attending webinars and classes, and then created a monthly webinar series for clients and prospective clients, discussing contract clauses, market conditions, how to have meetings in a bubble and more. “I told myself, ‘You are getting an MBA in crisis management right now, and you’re going to come out of this better than ever,’” she says.

Another third-party planner, who continues in that role and wishes to remain anonymous, stayed afloat during the downtime by offering extra services on the side that the umbrella firm does not provide: “I told smaller clients I’d charge a monthly fee to manage certain aspects of their events. I’m still doing that for a few clients.”

Rowan is glad he still has the might of Maritz behind him. “One of the reasons I haven’t hung up my own shingle, per se, is even with half the revenue that I would make on my own, I’m still more impactful being part of this umbrella,” says Rowan, who expanded his skillset during the pandemic by becoming proficient in Cvent’s registration systems and is now a Cvent administrator. “If there’s anything that the third parties have experienced over the last 10 to 15 years, if you’re not walking in the room carrying a big stick — a Maritz, American Express Meetings and Events — if you can’t point to the amount of rooms you’ve booked, you might get shut out.”

Back at headquarters

At the top of the third-party food chain, executives were making hard decisions to keep the doors open.

“One of our clients is an epidemiologists’ association,” says Brian Stevens, CEO of ConferenceDirect. “Not only did they cancel their 2020 annual meeting, but a physician who specializes in immunity said we were not going to be out of the woods for two years. At the time, we probably had 120 people on the payroll; I think I let 100 people go.” 

Those laid off were support staff, he notes. None of the planner associates were cut.

ConferenceDirect did what they could to help with the payback process. “The good news is that I was fixing to buy another company,” says Stevens. “I had saved up all this money, but that went out the window.” He stopped taking a paycheck, and others at headquarters took pay cuts. 

David Peckinpaugh Maritz Holdings
David Peckinpaugh, CEO of Maritz Holdings

Staffing issues were equally difficult for Maritz’s Peckinpaugh: “Because the majority of our cost is people, we didn’t have any choice but to look at furloughs and then, unfortunately, terminations.” 

He estimates the events division had to let go about 75 percent of the staff, and he wishes he had made those decisions sooner. “Looking back, the lesson is, you have to do that quicker, but we were erring on the side of our people as much as we could,” Peckinpaugh says. Luckily, he adds, two Maritz divisions — the employee-motivation arm, and the automotive retail-performance agency — did just fine. “Being part of a broader, bigger enterprise certainly helped the events division.”

At HelmsBriscoe, which had about 1,400 planner associates at the start of the pandemic, a decision was made to keep the finance and accounting teams fully staffed to support the planners as they moved and canceled meetings over and over again, according to Greg Malark, the third party’s COO.

He also notes that HelmsBriscoe did a lot of “disaster” business in 2020 and ’21, working with sequestered groups and others that made a point of gathering, giving the company a baseline of business to keep it afloat. 

Onboarding is ongoing

By the middle of 2021, hiring was accelerating at headquarters as business picked back up, but the Delta and Omicron variants of the coronavirus threw up a number of roadblocks. Still, even as Omicron continues to bedevil the globe, the pent-up demand for face-to-face events is sending the firms scrambling to bring new people onboard in one of the most competitive job markets ever.

“We’ve hired hundreds and hundreds and hundreds of people,” says Maritz’s Peckinpaugh, who notes that his company’s healthy brand and culture often help them win the battle for talent, as Maritz continues to hire in almost every area of the business. “We actually knew — and discussed quite a bit — that coming out of the pandemic was actually going to be the more difficult time, and that absolutely has proven to be the case.”

ConferenceDirect also has been on a hiring spree. In early 2020, the company signed a new lease on its building in Charlotte, N.C., which was subsequently let go when no one was allowed in the office. But this June, as the company’s call center is finally getting back up to speed, “We closed on a new building in Sacramento [Calif.], to replicate what we had in Charlotte,” says CEO Stevens, who is glad to have call center employees back in one place. “I think our people actually do a better job when they’re together,” he adds. “Still, we probably need about half as many people now as we will when we’re at full call capacity.”

A symbiosis with hotels

Both Stevens and Peckinpaugh say their companies’ relationships with the hotel brands are now stronger than ever after the turmoil of the 2018 commission cuts followed by Covid.

“The hotels have the right to do what they think is right for their business, but they can’t dictate how a customer wants to buy,” says Peckinpaugh, who notes that the downtime allowed for some powerful dialogue with Maritz’s supplier partners, resulting in a greater sense of empathy and understanding than in the past. “Is it across the board? Absolutely not. And as things get back to normal, that empathy is going to wane” if supply-chain and service-level issues continue to plague the industry.

“I’m bullish on commissions,” says ConferenceDirect’s Stevens, “The analogy I use is that I’ve never paid a realtor unless I bought a house. If realtors worked on a fee basis and I had to pay them even if I didn’t buy the house, I wouldn’t use that realtor. I like the commission model. You basically get paid when you perform.”

Tammy Routh, senior vice president of global sales, Marriott International
Tammy Routh, senior vice president of global sales, Marriott International

Hotel partners confirm that relations have been shored up. “The past two years have solidified for all of us how much we need each other... and reinforced the need for transparency, partnership and flexibility,” says Tammy Routh, senior vice president of global sales for Marriott International. “There has been a great deal of employee turnover with both hotels and third parties, so we are focused on training and education on the history of our relationships and the importance of our partnerships.”

Michael Dominguez, president and CEO of Associated Luxury Hotels International, thinks third-party planners are more important to the industry than ever: “Right now, they are really picking up steam, because corporate planners are struggling to pick up staff but they have to ramp up their meetings. So there’s a bit more of a dependency on the third parties. I think that’s going to be healthy for everybody.” 


 

How are third parties paid?

Whether they are part of a firm, such as Maritz Global Events or American Express Meetings & Events, or independent business owners, third-party planners typically have three ways to get a paycheck: by commission from the chosen venu, by charging the client a set fee per project, or by establishing a contract with the client for ongoing services or work on multiple events.

In the commission-based model, the client (the meeting host) pays nothing to the third-party planner for sourcing and booking a venue.

Planners paid this way used to get 10 percent of the total group room revenue, until Marriott International (quickly followed by Hyatt, Hilton and IHG) made the bold move to cut those commissions to 7 percent in 2018. Not all hotel companies followed suit, so commissions now range from 7 to 10 percent, with occasional bumps to 11 or 12 percent, with planners typically receiving half of the money at the time the business is booked and the other half when the event is completed.

The problem with commissions during the pandemic was that many third-party planners already had banked — or spent — that initial 50 percent when clients started canceling events and the hotels wanted their money back. In some cases, headquarters covered the payback, but plenty of planners had to do that themselves. — S.B.