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April 9, 2021

Hotel Commission Agreement

Filed under: Uncategorized — Chris Chaten @ 9:20 PM

In February 2018, Delta announced commission reductions on international flights to travel agencies. Discounts vary depending on itineraries and ticket classes, with the largest discounts for travel agencies that sell luxury and business travel. Since then, we have not seen any budget cuts and many airline executives have stated that leisure travel, not business travel, will lead the recovery of Covid`s airlines. It makes me think that in the near future, the agencies will not see any reduction in commissions for airlines. A flat fee from a travel agency is the simplest type of commission. The package is exactly what it looks like: each travel agency gets the same thing, no matter how much it reserves, what consortium they own or how cute its dog is. The flat commissions are actually the norm and predictable! hurrah! The same goes for Disney Cruise Line and Adventures by Disney products. Their commissions are staggered — we are talking in a second about staggered commissions — but the selling thresholds are the same for everyone. Individuals. agency. It`s over there. → hotel reservations and car rentals: These types of bookings usually pay 10% commission to travel agencies and that`s right. There are small variations, but only car and hotel bookings are probably the most predictable commission level in all this mess.

Airlines offer travel agency commissions on two itineraries: you can now see all the rooms available in Schick Hotels Vienna for your selected dates. The “Select the Hotel” drop-down menu allows you to select your favourite chic hotel. In the final step, please enter your customers` names and the phrase “Travel Agency Commission” in the “Hotel Comment” field and validate the booking by clicking “Book Now.” All right, you`ve probably discovered that the travel industry is about economies of scale. The more you put on the table, the more influence you have. It is therefore not surprising that hosts (a group of independent agencies with the same accreditation number) and consortia (accredited independent agencies, which partner to increase purchasing power and access to marketing/tech tools) are able to negotiate better commission levels. Prior to this year, the standard contract between an external meeting/event organizer and a client was in most cases relatively simple: the planner would not charge directly to the client. Instead, the reserved hotel would pay the planner a 10 percent commission on all used hotel rooms that cover their fees. It`s been like this for decades. But that changed on January 24, when Marriott International – which recently bought Starwood Hotels and Resorts – announced it was reducing the commissions it pays to planners for reserved room nights from 10 percent to 7 percent at its U.S. and Canadian properties.

Hilton Hotels and Resorts quickly followed. There was a lot of fuss and a lot of trouble, but when a third major hotel company, InterContinental Hotel Group (IHG), made the same cut at the beginning of May, the reaction subsided. While a few small chains and many independent hotels were announcing loud and clear, in the first few weeks, that they were going to stick to the 10 percent commission — a figure that, even for the rest of the year, increased by a few points to do business — there was a growing sense that the old business model of working for customers, but being paid by the suppliers who use them, ends up batting, and the standard contract is on its way out. I`ll lose money if I meet Marriott, Hilton or IHG at that time, because it costs me eight points to pay my salespeople and be on the ground for the meeting, and I`m only paid seven,” says David Bruce, CEO of CMP Meeting Services and founder of Meeting Planners Unite, a new association of third-rate planners, created after Marriott`s initial announcement.

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