Home' micenet eMag : micenet April 2018 Contents WHY DIVERSIFIED
BOUGHT A MEDIA
The purchase of Mumbrella by
Diversified which was up until
recently an exhibition company,
had many people scratching
their heads. Until you start to
think about it.
Speaking to micenet, Diversified
Communications Australia general manager,
David Longman explains that whereas meeting
planners are looking to grow the exhibition
component of their conferences, Diversified is
doing the opposite – broadening its often annual
exhibition portfolio across a 12 month period.
“An expo is limited because it is generally one
event that may rotate between Melbourne and
Sydney at one time a year for two, three or four
days. Outside of that, not a lot happens,” he
“What we want to do, and part of our strategy,
is to broaden our content and digital knowledge
and one of the key businesses that we’ve held
with high regard as doing that is Mumbrella.”
For those who don’t know, Mumbrella is a
digital news platform that focuses on the media,
marketing and advertising sectors. After being
founded in 2008 it at some stage began
running seminars for the sector. Last year it
produced 21 live events, with a particular focus
being on conferences.
Mr Longman says Diversified’s customers are
asking for broader and deeper connections
across the marketplace that stretch beyond the
traditional two, three, or four day expos, and
they felt that what Mumbrella was doing was
working. He said the content and digital
component of Mumbrella combined with its
events links the two very well and helps
substantiate the credibility of its events –
“broadening the ability to have a conversation
outside an expo”.
In 2017 the company also purchased the
Luxperience exhibition. m
Could this happen in Asia Pac?
Any third party company anywhere in the world that books Marriott venues in the U.S. and
Canada will see a reduction in the commissionable rate from 10 to seven per cent.
Mr Bruce does not believe that there will be a change of rate in the Asia Pacific simply because
Marriott offers “far and away the largest group facilities available” in the U.S. and Canada.
In the United States, Marriott has a 40 per cent market share, with upward of 30 brands.
“This is why they have the ability and the power to lower the commissionable rates for the
meeting planners. In the rest of the world, they are not as prevalent and thus do not control the
marketplace as they do here. This difference is the major reason why I don’t foresee the
expansion of this situation throughout the world.
“We are happy to have membership from all over the world in our organisation as there are
many issues we will be dealing with that are commonplace in Independent planning businesses
throughout the world.”
Australian based ASN Events executive director, Mike Pickford, told micenet he recently had
the Marriott team in his office and they reaffirmed that the 10 per cent commission to this region
was considered essential to conduct business and there were no plans for it to change.
Another planner, who did not wish to be named, said he would be looking at other hotel
groups in the U.S. and Canada.
“We rely on the commissions we earn to help our bottom line,” he said.
A spokesperson from the Marriott Asia Pacific communications department said: “Marriott
is dedicated to providing a best-in-class meetings experience across our 30 leading hotel
brands around the world. We are always looking for ways to improve our approach to
meetings and events.”
“We value our intermediary relationships and we will continue to work together to serve the
interests of our mutual customers. The new policy applies to all group intermediaries, including those
based outside the U.S . and Canada, when they are sourcing business for U.S . and Canadian hotels.
“Group business sourced to hotels outside of the U.S . and Canada by an intermediary are
subject to the commission terms of the respective continent, and remain unchanged at this time.”
The “big four” get special treatment
Already Marriott International has reportedly said to some third-party companies, which some
commentators are calling “the big four”, that it will honour some contracts currently in place.
The four companies are believed to be Maritz Global Events, HPN Global, ConferenceDirect,
Maritz Global Events, as an example, has 1500 employees, executes more than 8500
meeting, event and incentive travel programs per year, and books more than four million room
nights. Its total spend on behalf of its clients is almost $1 billion per annum.
These companies will reportedly receive the full 10 per cent commission for meetings that
were already contracted with Marriott.
The reason for reduced commission
Marriott said in its initial announcement of a reduction to commissions that its distribution costs
were growing faster than its group revenue.
“Costs are limiting our ability to invest in meeting products, experiences, and innovation.
Changing economics in this segment, plus these growth costs, required us to re-evaluate our
intermediary compensation model.” m
micenet will keep readers up-to-date with the latest developments.
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