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Hotels That Withhold Commissions Lose BusinessMarch 10, 2009 By: George Dooley
One of the top travel agency obstacles to expanding hotel sales is commission recovery,
according to Jeff Bzdawka, chief operating officer at TravelCLICK, who believes speedy payment has advantages for issuers as well as recipients. “When commissions are paid on time, more hotel bookings are generated by travel agents,” he said.
Bzdawka says that suppliers face challenges in processing commissions including administration of small payment amounts, high banking costs and complex payment reconciliation. Using services to help process commissions can surmount these challenges and improve business relationships.
TravelCLICK says the GDS still drives over 25 percent of global hotel bookings, or almost $20 billion in hotel revenue. It is a proven channel that allows hotels to target qualified consumers with specific travel requirements. “Yet the industry is plagued by a poor track record for travel agent commission payments," said Bzdawka. "What many hoteliers don’t understand is that not paying commissions can negatively affect their travel agency relationships—and ultimately reduce GDS bookings.”
“It’s simple—when hoteliers pay their referring travel agents on time, they get more travel agent bookings,” said Pedro Fernández-Salvador, CEO of WPS, a leading commission processing firm specializing in travel. “On average, our hotel customers experience an annual increase in GDS bookings when they automate commission processing.”
TravelCLICK reports it has teamed with WPS to offer automated payment processing, tracking, reconciliation and billing of travel agent commission payments through its iHotelier Central Reservation System. The interface allows TravelCLICK clients to have full visibility and control of the commission payment process through the web-based WPS Webportal. Over 80 percent of payments are made electronically, so hoteliers save on time and resources while building a stronger relationship with key sources of booking revenue.
“Through this alliance with WPS, TravelCLICK is helping build a connection between hoteliers and travel agents worldwide by facilitating accurate, on-time commission payments,” continued Bzdawka. “It’s a win-win proposition that ensures commission recovery will not limit hotel bookings potential. Hoteliers drive incremental bookings while agents book the property that will deliver the best guest experience for their clients.”
With this new service, TravelCLICK brings more capability to its Distribution Solution portfolio. This includes iHotelier, the iStay web booking engine, and ChannelDirect. ChannelDirect allows hotels to manage price and inventory with a single web-based interface.