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.
“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.