InterContinental Hotels Group (IHG) is the next major hotel company to cut group booking commissions, joining Marriott International and Hilton.
In a letter to travel partners this week, IHG announced it will reduce third-party planners’ commissions from 10 percent to 7 percent, beginning Jan. 1, 2019, for bookings made at U.S. and Canadian properties.
Contracts signed prior to that date will be eligible for 10 percent commission. Commissions for IHG hotels outside the U.S. and Canada will remain unchanged, including bookings at IHG hotels in Puerto Rico.
In a statement to TMR, Derek DeCross, senior vice president of global sales for IHG, said that “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.”
In the letter to agents, DeCross told third-party intermediaries for meetings and events that "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."
"As part of this, IHG has assessed its group booking commission structure and will be changing the group travel partner commission structure."
IHG brands include InterContinental Hotels & Resorts, Kimpton Hotels & Restaurants, Crowne Plaza Hotels & Resorts, Hotel Indigo, Even Hotels, Holiday Inn, Staybridge Suites, and Candlewood Suites. In the Americas, it operates more than 4,000 hotels, with another 1,086 in the pipeline.
At the time, President and CEO of the American Society of Travel Agents (ASTA) Zane Kerby said “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.”
Kerby also said that ASTA is “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.”
Other brands are using the opportunity to prove their commitment to the trade. Dream Hotel Group, for example, is offering a 12 percent commission to conference and event organizers, third-party meeting planners and group travel agents, now through Dec. 31, 2018.
Several hotels chains TMR spoke with previously, including Omni Hotels & Resorts, Wyndham, and Preferred Hotels & Resorts, reaffirmed they had no plans to change their relationship with intermediaries.