Hilton Cuts Group Commissions

Bringing more than two decades of hospitality expertise to the role, Michael Feeley will oversee operations, financial performance and guest satisfaction at the resort.

 

Hilton has become the latest major hotel company to cut group commissions, a company representative tells Travel Agent. Effective October 1, the company will revise its base group sales commission rate to 7 percent for bookings at participating hotels in the United States and Canada. All existing businesses booked before October 1 will be honored at the previously contracted commission rate.

DAILY NEWS & DEALS NEWSLETTER

Like this story? Subscribe to Daily News & Deals!

Featuring breaking news on the latest product launches, deals, sales promotions, and executive appointments. Be sure to sign-up for this free industry daily newsletter.

“At Hilton, we recognize the important and integral role group intermediaries play in our meetings and events business, and we are proud to partner with a wide network of travel professionals to create meaningful experiences for our guests,” said Danny Hughes, senior vice president and commercial director, Americas at Hilton, in a statement provided to Travel Agent. “At the same time, we also have to balance the needs of all parties, and we therefore continually review our sales and distribution strategies to ensure we are offering the best value for our customers, hotels and owners.”

Hughes said that the change would ease operations costs associated with group revenue and allow the company’s owners to make further product investments over time.

The move is similar to Marriott International’s decision to cut group commissions at its U.S. and Canada properties from 10 percent to 7 percent. That change, which was announced back in January, will take effect March 31.

Travel Agent asked Hilton whether some groups with existing contracts would continue to receive the old commission rate, as had happened with companies with pre-existing contracts with Marriott. Hilton would only say that all existing business booked before October 1 would be honored at the previously contracted commission rate.

Marriott’s move drew broad criticism from industry leaders Travel Agent spoke with, many of whom said that they would work to assess the impact of the new policy on their member travel agents’ businesses. Others, including ASTA CEO Zane Kerby, expressed disappointment in the message the move sent regarding the value of travel agents.

The moves to cut group commissions come at a time of heavy consolidation in the hotel industry. Marriott’s announcement came a little under a year after its mega-merger with Starwood Hotels & Resorts, which made it the largest hotel company worldwide.

At the same time, not all hotel companies have been following Marriott’s lead. Many hotel companies have launched temporary promotions to raise group commissions, such as Denihan Hospitality, South Seas Island Resort in Florida, two Nobu Hotels properties in Miami Beach and Los Cabos, and Eden Roc Miami Beach, to name a few. Shortly after the Marriott announcement a Wyndham Hotel Group representative told Travel Agent that the company would hold its group commission levels steady.

Related Stories

70% of Travel Agents Say Marriott Commission Cuts Will Hurt Bottom Line

Worried About Commission Cuts? ASTA Offers Training on Agent Fees

Vacations By Rail Raises Travel Agent Commissions

REI Adventures to Offer Commission, Travel Agent Program

Suggested Articles

A guide to the best hotels near Buckingham Palace, from five-star grande dames to budget accommodations. Learn more here.

The Harmony of the Seas will instead sail to St. Maarten, the ship's next scheduled port of call. More here.

The multiphase renovation project is budgeted at $9.2 million and will introduce multiple enhancements to the property. Learn more about it here.