No IATAN number, no commission. At least not from Marriott Hotels. The announcement fueled speculation among meeting professionals. What does this mean for the industry? Will other hotel chains follow suit? What does it mean for companies that rely on commissions? And what does it mean for the small, independent meeting planner? Are they being squeezed out of the picture?

Those reading the industry chat rooms, listservs, and blogs right after Marriott's announcement would have said the answer to that last question was a resounding "yes." Small planning companies and independents registered shock over the new requirement. Many said they simply wouldn't include the hotel giant in RFP distributions.

Now that the dust has settled, some independents have come to see the policy change as an opportunity to move their business model from a commission- to fee-based structure. It has forced others to pursue accreditation, which they've found actually resolves other issues they have faced.

Marriott Has Its Reasons

"Over the last several years, many of our valued third-party channel partners encouraged us to centrally pay group commissions, be more consistent with the payment, provide a consolidated payment and statement with greater detail, and to offer better support to resolve commission issues," said Julius Robinson, vice president sales, intermediaries, Marriott Hotels. "In addition, they have (as Marriott has) recognized the growing trend of non bona-fide group intermediaries requesting commission payments but not providing the influence and services commensurate with commission compensation."

It also comes down to what Marriott believes is an issue of customer service (the meeting planner being the customer in this case). "In Marriott's tradition of listening and responding to the needs of our partners, we invested in a system that would allow us to respond to these needs and leverage the industry accreditations that exist for third-party meeting planners," Robinson said.

The new policy, which applies to all Marriott-branded hotels with the exception of Ritz-Carlton, took effect on June 1, and states that Marriott pays commissions only to industry-accredited North American group intermediaries. To determine whether an intermediary has been accredited, Marriott refers to the only industry accreditations available designed to meet the needs of meeting planners and other group intermediaries: IATAN's Travel Sales Intermediary (or TSI) program and IATA's Travel Industry Designator. In addition, Marriott accepts a traditional IATA (Airline Appointed) or ARC number. (Go to www.marriott.com/marriott.mi?page=thirdparties for more details.)

What's a Meeting Planner to Do?

After the initial shock wore off, many independent planners took the plunge and applied for the accreditation required by Marriott. Lori Kolker, president of Elle K. Associates Inc., shrugged her shoulders and said her business - which is 100 percent commission-based and did $1 million in sales with Marriott last year - simply needed to get an IATAN number.

"I was taken aback because they didn't give us a choice whether to move forward with the IATA number or not. It was either get one or we won't work with you anymore," Kolker said. "However, after the whole process was finished, I am so glad they made us get the IATA number. We don't have to invoice any hotels with our IATA number in the future and we can book less than 10 rooms and still get paid through reservations with our IATA number."

While Kolker is pleased with the result, she admits the accreditation process was not easy, requiring excessive paperwork (including bank statements, financial statements, and tax returns), letters of recommendation, proof of a legitimate business (such as a business license), and the listing of her business in a directory such as a telephone book or Web site.

In addition, there is a fee associated with the IATAN application (up to $190 depending on the time of year). Some might find hiring an accountant and/or lawyer appropriate, depending on the size or complexity of their business.

In the end, Kolker said she would only recommend undertaking the time-consuming process if you have "volume business with Marriott."

Volume might be the factor that determines whether your company can actually be accredited. There are minimum requirements for travel income and sales: One of the general business requirements on the application states that the business must have been in operation for a least one year immediately prior to application and produced at least $20,000 in gross travel income or $200,000 in gross travel sales in the previous 12 months.

What if you're a small independent and most of your business is based on fee for service? What if you don't meet the minimum requirements of the IATAN application, but you still do business based on hotel commission?

Marriott says to check with the International Airlines Travel Agent Network (www.iatan.org). In most cases, according to Marriott, IATAN considers other services besides booking rooms, such as planning and logistics, as travel income.

Consider the Options

If going the IATAN number route isn't for you, there are alternatives. Some planners have moved away from commissions altogether. While this isn't a new idea, it may be gaining in popularity. "I started out working off of hotel commissions, but the majority of my business is fee for services, so the hotel commission structure was never a major part of my business model," said Jennifer Collins, CMP, president of The Event Planning Group LLC.

"The decision by Marriott did not affect my business as I had already begun to move away from accepting commissions. I feel in order for the commission structure to be of benefit, you have to have a high volume of that activity," Collins said. "Even though I still provide the service of booking hotel space and reviewing contracts, I have structured my business to be paid a fee for those services."

For Collins' business model, this is preferable to waiting for the meeting to occur and the fees based on room nights actualized. "If I were producing more volume, it would make sense to obtain the IATA number," she said.

By moving away from commissions to a fee-based system, independents also remove any suspicions their clients might harbor that they receive kickbacks from certain hotels or that they recommend those with a higher room rate simply to bolster their commission.

Enter the Big Boys

Larger third-party companies, like ConferenceDirect and Experient, have had no issue with the change as both companies already had an IATA number. In fact, the change has made getting their commissions easier.

Experient Chief Marketing Officer Rick Binford, CMP, believes the Marriott change "helps maintain industry professionalism at all levels and legitimizes the commission compensation model for qualified entities, as well as helps to protect client interests."

Binford noted that commission payments from Marriott are now received consistently within 45 days post program, versus an average of 90 days, and that payments are transferred electronically versus receiving paper checks. Plus, he said, the "one complete payment and one statement reduces reconciliation time. There is one central point of Marriott contact for questions and follow-up service, eliminating other internal intermediaries' need to contact individual hotels."

"This particular move on Marriott's part favors our company because we've always had an IATA number and we're paid more efficiently than the small 'mom and pop' independent firms," said ConferenceDirect President and CEO Brian Stevens.

In addition, Stevens surmises one reason Marriott made the change was because "Marriott doesn't want to employ national sales representatives to third-party planners. It's the 80/20 rule where you deploy 80 percent of your workforce for 20 percent of the money-makers."

As to the concern about other hotel chains following in Marriott's footsteps, no other chain representatives contacted for this article said they would be making that move anytime soon. A spokesperson for Hilton said that the change at Marriott is a sensitive subject and the commission policy at Hilton-branded hotels has not been modified nor are there are no plans to do so at the moment. That's a stand that might give Marriott's competitors a leg up among some independents.

Alan L. Kleinfeld, CMP, has nearly 15 years of experience in the meetings industry and more than 20 years as a contributing writer and editor.