Home' micenet eMag : micenet October November 2015 Contents The business event sector appears divided
on this subject which doesn’t make life easy
for those who are looking at hiring a PCO to
run an event for them.
Roslyn McLeod of Arinex has been a strong
advocate for a combination of PCOs being
paid commissions and a fee for service, but is
strongly for transparency in all transactions.
“We take commissions from hotels to
manage the marketing, inventory and
customer relations on behalf of hotels for our
conference clients,” Ms McLeod says.
“It is rare for Arinex to take other
commissions even though we are a licensed
travel agent and entitled to do so.
“We hope this article will allay the fears that
seem to have festered in the marketplace
about the commission issue. Arinex declares
our position in contract, however, it is very
offensive that some clients sometimes still seek
to find out how much commission we make?
Where does this notion come from? As a long-
standing company under one owner who has
consistently reinvested in the business to build
it and make it of world standard we simply
have depth and breadth of good management
and staff, work on consistent improvement of
processes and systems, and have built a
constantly evolving infrastructure to deliver
delight to our clients. We are successful and
share our success with our clients without
commission revenue streams.
“Commissions are one of the revenue
models adopted by some PCOs. It is not illegal if declared both by the company paying the
commission and the one receiving it. Some clients are happy to have their PCO make up their
revenue through commission as it is considered by some clients to be a normal way of business
and an advantage to their expenditure levels if the PCO revenue is supplemented by the
suppliers as it is perceived that it keeps down the overall expenditure by the client.
“I foresee commissions but probably in the future becoming an integral way of doing business
for many operators if the pressure on transparency does not ease up. There has been a
preoccupation with stripping PCOs and suppliers of their revenue to build, maintain and sustain
their businesses and in so doing clients are driving a shift in the market place. The worry is that
it may force suppliers to offer covert financial exchange to enable businesses to survive and
thereby push power to those suppliers who take this avenue of action.”
Another long-time industry member, Peter Sugg of AST Management, says if a PCO is
receiving commissions from a client’s suppliers then it must be declared in their agreement/
contract with the client.
Mr Sugg says this assumes the PCO is the agent of the client and is working under their
“If the PCO is the principal, is providing all goods and services, and is responsible for the
payment of all accounts to venues and suppliers, then they can have commercial arrangements
in place with those suppliers. The client should always approve the initial event budget which
would clearly show the proposed cost of all services/products,” he said.
“The obvious exception in both cases is the commission paid on room sales. If the PCO
manages the room block they will be entitled to payment from the venue(s). The PCO should
not/do not charge the client for managing the room block.
“I don’t think there are any PCOs who are surviving on a `commission only’ model. A 300 to
400 person conference with four streams, call for abstracts, website requirements, social media
and marketing management, sponsorship acquisition and management, delegate registration
and accounting and banking services will take from 600 to 1200 hours to organise, depending
on the complexity and needs of the client. At the end of the day the PCO needs to be paid for
the hours they allocate to the project.
“There is a new model that is starting to gain popularity with some association and `not-for-
profit’ clients. This is where the PCO takes all the risk for the outcome. In this case fees and
charges will be higher and suppliers may pay commissions. This is a matter solely for the PCO
as they are, in effect, financing the event.”
PCO COMMISSIONS V
FEE FOR SERVICE
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