IHG and Hilton Hotels has joined Marriott in reducing commissions to third parties in the U.S. and Canada.
arriott’s decision earlier this year to reduce commissions to third parties from 10 per cent to seven per cent has now been taken up by two more hotel companies – Hilton and the InterContinental Hotels Group.
As reported by micenet (April/May 2018), Marriott decided in January to reduce commissions to paid intermediaries like venue finders. Hilton followed shortly after, with its new commission structure coming into effect from October 1. Now micenet is told that IHG is following suit, with the new structure starting in 2019.
The good news for the local market is that neither Hilton or IHG have any plans to reduce commissions in the Asia Pacific.
Senior vice president of global sales at IHG, Derek DeCross said the change allows IHG to “balance the needs of our guests and owners by reinvesting the savings into programs and improvements that will benefit the guest experience”.
“Commissions for IHG hotels outside the U.S. and Canada will remain unchanged,” he said.
New group swells in numbers
A result of the announcement by Marriott to reduce commission to third parties has been the creation of an independent body of meeting planners, with numbers reportedly swelling to 1300 on LinkedIn.
The organisation – Meeting Planners Unite – has now shifted its focus to a website platform – www.meetingplannersunite.org.
“With our hotel chain `partners’ not seeing our value by cutting our commission, we must unite to show the industry the power of our members,” said founder David Bruce.
On its LinkedIn page it was willingly displaying hoteliers that vowed they would not be reducing their commission rates in the U.S. and Canada, with some even offering more than the standard 10 per cent.
Marriott now targets online bookers
Marriott’s next strategy is to now reportedly renegotiate contracts with online travel agencies, with plans to reduce commissions, in the U.S. at least, to under 10 per cent.
Other hotel chains will no doubt be waiting with anticipation for those meetings to take place.