Wednesday, December 2, 2009

How Do Meeting Planners Get Paid?

There are essentially two ways for a meeting planner to be paid for their services: fee for service or through commissions.

Earning a commission is a very common way for meeting planners to be paid for their services. Their fees are typically determined as a percentage of the guest room rate negotiated with the hotel or hotels that are hosting the event – and the hotels pay that percentage directly to the planner after the conclusion of the event. So, with a 10% commission and a negotiated rate of $150 per night, the planner would earn $15 (from the hotel!) for each night someone paid to stay at the hotel. For small groups, this does not usually result in a very large fee but, with large groups, this can add up to quite a tidy sum for the planner. A major advantage of this fee structure is that the client does not pay for the planner’s services out of their event budget, which can help their event’s bottom line.

“Fee for Service” is the other method commonly used and it can be calculated either on an hourly basis or for the whole project.

A planner who is paid by the hour simply determines an hourly rate for their services, which may vary by service or be a set amount across the board. In either case, there is a menu of services for clients to choose from. The main advantage here is that it is easy for the client to approximate the planner’s fees even before putting the project out to bid. They can also easily compare those costs against the staff time they would have to allocate to the project if they were to do it in-house.

Planners who are paid a fixed amount for the project determine how much to charge for a given event based on the size and complexity of the project – each job is different – and then works with that client to refine the scope of work and the fee until both parties reach an agreement. Though determining the final fee and scope of work for the project can be tricky, once they have been determined, an agency then knows exactly how much they will be paying for the planner’s services and exactly what those services will be.

While this brief overview does not give all of the ins and outs of each method, it is worth noting that most planners will work with you to find the approach that is right for you and your event. RDL typically sets a fee for each event or series of events that we do for our clients. However, we do still work with hourly rates and, occasionally, commissions to create the best fit to our clients’ needs.

Karl Baur, CMP • Project Director, RDL enterprises