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A year later, group commission cuts still sting

01/24/2019| 7:02:40 PM| 中文

Some hotel chains and properties have maintained or even increased commission rates while major hotel groups reduce commissions on group bookings.

Though roughly a year has passed since Marriott International kicked off a wave of group booking commission cuts within the hospitality space, travel advisers and meetings planners are still reeling from the blow.

Last January, Marriott became the first major hotel group to announce that it would reduce its commissions on group bookings at North American properties from 10% to 7%, effective March 31, 2018.

Hilton and InterContinental Hotel Group quickly followed suit, bringing their group bookings commission rates in line with Marriott's. Hyatt, meanwhile, hopped on the bandwagon in November, with its 7% group bookings commission rate set to start with business booked in the U.S. on or after Feb. 1.

Bonni Scepkowski, president and chief strategy officer for Stellar Meetings & Events, said, "We're adjusting, but it's been really disappointing. Since Marriott took that first leap, everyone has followed, including companies that said they wouldn't, like Hyatt. I just got my first 7% commission check from the past year, and it was a shocker."

While Scepkowski's commission cutback has largely been offset by her fee-based model, in which any commissions she earns are shaved off a client's fee, she has also pursued writing and training opportunities in order to diversify her income.

For Eric Hrubant, president of CIRE Travel, the commission cut is just one more concern in a litany of issues that come with booking a major chain property. 

"I'll never guide my clients to where I make the most money, but I will certainly guide them to where we have the most ease," Hrubant said, adding that group bookings account for around 25% of CIRE's business. "If I'm dealing with a big chain, I'm going to have to deal with someone at a corporate office and then also deal with someone at the hotel level. What will be easier for us, oftentimes, is working with smaller or independent hotels because everything is done in-house, and they're more flexible."

Hrubant added that the decrease in group commissions has not affected his bottom line so far, due in part to the fact that he's been working with chains and properties that have maintained or even increased their commission rates, such as AccorHotels and Loews Hotels.

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TAGS: group booking | commission | Hyatt | Marriott | Preferred Hotels & Resorts
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