Hilton has announced plans to cut third-party group and meeting planners' commission rate from 10 percent to seven percent on bookings made at hotels in the U.S. and Canada.
The reduced rate will be effective October 1, 2018.
The disappointing decision for agents comes exactly two months after Marriott International announced it would slash commissions paid to group and meetings intermediaries from the standard 10 percent to seven percent.
Marriott's reduced commission takes effect at the end of the month.
Similar to Marriott, Hilton cited rising group distribution costs as the reason for the change. "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. 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," said Hilton senior vice president and commercial director for the Americas, Danny Hughes, in a statement.
"In light of growing group distribution costs and the complexity of intermediary services offered, Hilton has revised its base group sales commission rate to seven percent for bookings into participating hotels in the U.S. and Canada, effective October 1, 2018. All existing business booked before October 1, 2018, will be honored at the commission rate previously contracted," added Hughes. "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."
The decision is all but certain to result in a backlash from the agent community, which has been extremely vocal in the months since Marriott's announcement. Many agents have said they plan to stop doing business with the company.
"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 (ASTA), said in a statement Friday. "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."
While it's possible more hotel companies could follow suit, some are likely to view the trend as an opportunity to attract business from disenchanted agents looking elsewhere.
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