A business events insider has warned corporate companies to ask their suppliers for full details of their relationships with venue operators and product providers following revelations that at least one high-profile organisation has been asking suppliers to pay them money to become a preferred supplier.
The individual, who did not want to be named, said the company, which organises meetings, incentive travel and events for corporate clients, had approached venues and business event services providers asking them to pay thousands of dollars to be placed on their preferred supplier lists. This list of preferred suppliers is then what this organisation puts forward to new and potential clients when pitching for business.
The individual said this was not giving the client a level playing field, and they were not being given a fair and true collection of all available venues and products.
“This kind of activity is reminiscent of the prohibition era in the United States,” they said.
“They are potentially doing a disservice to the client by not giving them the complete picture. They are being ruled not by the venue or the product that best suits the client but by the financial relationship they have with specific venues and products that have agreed to these secret relationships.”
The person who contacted mice.net said the scenario was simple and alarming. If, for example, a company was looking to take a group to Singapore then the organisation would only put forward those venues and product suppliers who were paying them money to be on the preferred list, even if these venues or product suppliers did not fit the exact requirements of the group.
“The client isn’t aware that this is happening and is not being given the full picture,” they said.
“What’s more, most companies I know would not like this kind of practice.”
Another individual, who again did not want to be named, also knew of this practice, agreeing that it reeked of deception.
They added further that they were seeing a few greedy meeting, incentive travel and event planners agreeing to only shortlist venues to clients once commissionable rates on rooms and other services, such as food and beverage, were agreed upon in advance.
“With one planner this has happened to me twice. They said that my venue had been short-listed but if I didn’t agree to pay them commission on virtually everything – rooms, food and beverage, team-building activities, transfers and the like – then it wouldn’t be moving to the next stage. By this I believe they meant that they wouldn’t be presenting my property to the client.
“The issue I have with this is that they are not matching the customer with the venue that may be right for them. And the customer doesn’t even know about it.”
The individual said it was imperative that planners were upfront with their clients, and they ensured that their clients were being given the final choice.
They said they were strongly in favour of the practice of some meeting, incentive and event planners of charging a management fee, and only receiving a commission on accommodation which would, naturally, be understood and acknowledged by the client.
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