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Are agencies blackmailing venues over commission?

Venues say agencies are threatening to pull business if commission isn't matched, latest EventHuddle debate hears
11/08/2016

Pictured: (from left) Juliet Price (HBAA), Des McLaughlin (events veteran), moderator Samme Allen (Sequoia Partnership), Rachelle Valladares (Dezika) and Carlo Zoccali (Arsenal FC)


Some agencies are threatening to take business elsewhere unless venues match their competitor’s commission rates, in a practice that has been called “totally unethical” at the latest EventHuddle.


A venue-based audience member told the panel that he had encountered situations where agencies had been “completely blatant” with wanting higher commission rates, saying “some will say ‘Venue B has offered us 15 per cent – if you don’t match it, the business will go to Venue B’.” He added: “It’s a small portion but there are some agents that do it.”


Panel member Rachelle Valladares, from Dezika, said: “To me, it’s something I’d never even thought about because it’s totally unethical.”


Fellow panel member Juliet Price, consultant executive director at HBAA, added: “We don’t dictate commercial terms … that’s a discussion between the venue and agent. But certainly in the spirit of the Code of Practice, we’d like to think that wouldn’t happen on any sort of scale. If a venue or agent you feel contravenes the code, you can raise that with (HBAA).”


The comments came in the latest EventHuddle discussion at 1 Wimpole Street on Thursday morning, on the topic of Venue booking commission: is it time for change?


Valladares and Price were joined on the panel by former Grass Roots Group MD Des McLaughlin and Arsenal Football Club sales and operations manager Carlo Zoccali.


Zoccali advocated for a change in venue finding commission, saying there needed to be more clarity in the process. He said: “We need to get some more understanding of what best practice is… so if you’re  a smaller venue, can you afford to pay 15 per cent on commission rates when you’ve got overheads etc to pay?”


He said it wasn’t always a level playing field for venues. “The independent properties I come across are constantly whinging about different styles of commission or partnership fees or things they have to pay to level the playing field with bigger boys. If venues are looking at commission and partnership fees, then there must be clarity on (what is what) to understand what we’re trying to achieve.”


Price said commission rates were becoming far more visible over the years and encouraged agencies and venues to share information. “Collaborating is all about best practice,” she said. “Some contracts state what commission is being paid. It’s far more visible than it was 10 years ago.”


Another audience member raised the question of venues having to “pay to play” and whether it was acceptable. McLaughlin said: “I’ve never charged hotels to pay a fee to be on venue databases. There are companies who do it. I don’t know who they justify charging it to, but if venues want to pay it then they can. Maybe it’s up to them (venues) to go in and understand how the agency works and ask questions and see if they’re comfortable with it.”


Moderator Samme Allen, co-founder of the Sequoia Partnership, said: “The words communication, transparency and clarity seem to keep surfacing and I think this is a debate that needs to be continued.”



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