Marriott has just announced that it is cutting the commission it pays to third-party meetings planners from 10% to 7% for properties in the US and Canada from 31st March.
The change was announced in a letter from Tammy Routh, senior vice president of global sales for Marriott International to meeting planners on 24th January.
In the letter she said, "Marriott's group distribution costs are growing faster than our group revenue; these costs are limiting our ability to invest in meetings products, experiences and innovation. Changing economics in this segment, plus these growing costs, required us to re-evaluate our intermediary compensation model."
It is industry standard to pay event planners commission of 10%, although some properties pay more for group business.
The concern for agencies is that Marriott's dominant position will see others in the sector follow suit.
The merger between Marriott and Starwood which was completed in September 2016 has given it an estate numbering more than 1.1 million rooms worldwide, making it the biggest group in those terms.
It is not a baseless concern. The group's decision to implement 48-hour cancellation policies last summer was swiftly followed by the other major players.
Although the policy currently only applies to North America, it could be rolled out worldwide if the group does not lose significant market share.
The meetings agency sector here in the UK has been undergoing consolidation in the past few months.
In July 2017, American Express Global Business Travel announced the acquisition of Banks Sadler, the number two meetings agency in the UK by event-based turnover.
At the time, Banks Sadler CEO Leigh Jagger called the acquisition "a pivotal moment" and said the deal would allow it to offer "best-in-class, event planning and management while benefitting from American Express Meetings & Events' supplier relationships, global scale and expertise of strategic meetings management programmes".
In December, the meetings and events arm of BCD Travel announced it was acquiring Grass Roots, which has operations in the UK, Germany, US, Switzerland and Singapore.
Many meetings specialists will be highly concerned about Marriott's move as some depend entirely on venue commission for their very existence. A cut from 10% to 7% sounds trifling but represents a potential 30% loss of income for agents.
If Marriott's bold move is copied by other groups, consolidation in the sector can only increase.