Russell Of Hotels

blog

In Search of 3% - Marriott & Hilton have cut commissions? Now what?

In Search of 3%

By now, we've all heard the latest: Hilton has followed Marriott in reducing 3rd Party Commissions from 10% to 7%.  My guess is that the remaining major hotel chains will follow suit by year's end. Why? Only the hotel chains know for sure, as we can only speculate. Now what? Do we fold up our businesses and go home or do we open the doors to other opportunities? One thing I've always done is diversify the list of hotels that I present to my clients, meaning I don't only source the big national chain hotels. My average program size is 35-55 rooms on peak, a perfect fit for some of the Indie hotels who have great properties and staff but aren't Nationally recognized. And guess what? They offer some great rates and concessions, as well as still offer the 10% commission, some even 12%. If anything, we have learned that change is inevitable. And in this ever changing climate, we have to be several steps ahead. Other things that can be done to close the 3% gap include:

 

  1. Strengthen your relationship with your hotel partners. There will be opportunities to earn a 10% commission (i.e., Need or Opportunity dates) 
  2. Transportation Companies - are you currently receiving commissions? If not, make it happen.
  3. Placement Fee - have you ever asked for one?
  4. DMC's - offer commissions for some of their services.
  5. Cruise Lines - they offer more than 10% in commissions off total group spend and groups are considered 8 staterooms or more.
  6. Convene Meetings - they offer commissions on Meeting Packages.
  7. Invest in obtaining an IATA number if you don't already have one.
Russell Edmond