Hilton is joining Marriott International in cutting group commissions, effective Oct. 1. The company is pulling back its base group sales commission rate to 7 percent, down from 10 percent, for participating hotels in the U.S. and Canada. Existing bookings made before Oct. 1 will remain unaffected by the new rate.
In a release, Danny Hughes, SVP and commercial director, Americas at Hilton, said the new rate has been chosen as a result of rising costs associated with the meetings and events market, as well as the need to invest more capital in the improvement of meetings facilities across the U.S. and Canada.
“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,” Hughes said in a statement. “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.”
Hilton’s decision follows a similar move by Marriott in January, when the company also slashed its group commissions to 7 percent for hotels in North America. A 3-percent cut in commissions is a sizable loss for travel agents, no matter how you slice it, and with two of the largest hotel companies in the world adopting these changes it will be difficult for meeting planners to book alternatives. Hilton alone operates 13 brands, and increasing consolidation throughout the industry means it is only a matter of time before others are pulled beneath its umbrella.
“At a time when consumer usage of travel agents and advisors is on the rise and awareness of the irreplaceable role that agents play in the travel industry is growing, it is disappointing to see supplier partners moving in the opposite direction and devaluing their relationship with our members," Zane Kerby, president and CEO of the American Society of Travel Agents, said in a prepared statement. "As the national trade association for travel agents, we are committed to defending and sustaining that role and intend to spotlight suppliers whose business practices recognize agents’ value, to raise concerns as appropriate with governmental stakeholders about the impact of supplier consolidation, and to otherwise give our members the tools they need to thrive in this complex and ever-changing industry."