May 15, 2018

Marriott, Hilton, IHG: are cuts to group commissions fair play or shortsighted?


IHG has become the latest chain to axe commissions for hotel group bookings. But at a time of rising competition and soaring advertising and marketing costs is this wise?

As hotel management companies have consolidated and shifted to a more asset light model, the competition and pressure to deliver to hotel owners and shareholders has intensified. Earlier this year Brian King, Marriott’s global officer of digital, distribution, revenue management and global, explained the move by saying that the firm remains “very, very committed” to intermediaries and partners, but also to hotels and hotel owners.

However, as is very often the case in the hotel industry, views on the move are polarised. Richard Lewis, CEO NPD Hotels (formerly CEO of Best Western Hotels GB, and Landmark Hotels, Dubai) for one, thinks the commission cuts are fair play. “Intermediaries never like commission cuts. Many of us remember when British Airways started to cut travel agent commissions down to 1% back in the early noughties! ABTA, representing about 7,000 retailers in the UK at the time, said its members would not be able to survive on 1% commission.”

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