InterContinental Hotels Group is following in the footsteps of Marriott International and Hilton as it cuts back on third-party commissions.
IHG is dialing back its sales commissions from 10 percent to 7 percent for all bookings made in the U.S. and Canada as of Jan. 1, 2019. Kimpton Hotels & Restaurants, which was acquired by IHG in 2014, will also be included in the policy change. The 10-percent rate will still be in place for IHG properties outside of the U.S. and Canada, including Puerto Rico.
“This move allows us to balance the needs of our guests and owners by reinvesting the savings into programs and improvements that will benefit the guest experience, Derek DeCross, SVP of global sales for IHG, said in a statement. He provided further comments on the policy change in a letter sent to third-party intermediaries for meetings and events:
“Understanding the complexities of the groups and meetings industry and the nature of the business being booked by our customers is an integral part of our sales strategy and foundational to what we do,” his letter reads. “As part of this, IHG has assessed its group bookings commission structure and will be changing the group travel partner commission structure.”
The shift in commissions structure is a symptom of the high levels of consolidation currently taking place in the industry. Marriott, Hilton and IHG are three of the largest hotel companies in the world, and they are now using their immense portfolios as tools to cut into commission structures.
Meanwhile, last month two other hotel companies actually revealed plans to offer higher commissions for third parties. Warwick Hotels and Resorts is offering an additional 5-percent commission on food & beverage and room rentals for all meetings and incentives groups at its seven properties throughout the U.S. and Bahamas. Dream Hotel Group is also now offering a 12-percent commission for groups and meetings booked in 2018, signifying an eagerness to capture any meetings or group business willing to walk away from the industry’s bigger names.