Hilton Hotels & Resorts has announced it is to cut group commissions for meetings and events from 1 October 2018. The move follows the Marriott hotel chain that announced a similar model shift in 2017.
The group will cut back its base group sales commission rate to 7%, down from 10%, for hotels in the US and Canada.
The hotel group released the following statement: “At Hilton, we recognise 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. 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.
“In light of growing group distribution costs and the complexity of intermediary services offered, Hilton has revised its base group sales commission rate to 7% [from 10%] for bookings into participating hotels in the US and Canada, effective October 1, 2018. All existing business booked before October 1, 2018, will be honoured at the commission rate previously contracted.
“This change, whilst easing operations costs associated with group revenue, will allow our owners, over time, to make further investment in products and offerings that enhance the guest experience.”
Juliet Price, HBAA consultant executive director, responded to the announcement, telling CN: “Our agency members are disappointed to see Hilton Hotels cut commission for bookings placed in North America and Canada, and will be considering the implications for their businesses. Despite the reduction in commission by Marriott and Hilton for this region, it remains a robust business model, especially in the UK, Europe and other key destinations where the agency sales channel is highly valued.”
Danny Hughes, senior vice president and commercial director, Americas at Hilton, added in a further statement the move aims to “better balance the needs of all parties.” He said: “Group intermediaries play an integral role 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. We continually review our sales and distribution strategies to ensure we are offering the best value for our customers, hotels and owners. Hilton is making this change in order to better balance the needs of all parties, and enable owners to invest more in innovations that ease and enhance the guest experience. As Hilton continues to innovate and provide our customers with reasons to be loyal, we will continue to rely on our intermediary partners to help differentiate Hilton in the market.”
UPDATED 12.34; 27.03.18
