Outrage follows Hilton commissions slash

Hilton Hotels & Resorts have announced that they will cut the commission they pay to third party meetings planners from 10 per cent to seven per cent. This will affect meeting planners who book business at Hilton’s U.S. and Canadian Hotels and will come in to play on October 1st 2018.

The announcement has been met with outrage in the meetings and events industry with many third-party planners left outraged at the decision.

All Hilton agency clients in the UK received an email this morning from Patricia Page- Champion, senior vice president and commercial director for Hilton Europe, Middle East and Africa, with the following announcement:

“To our valued partners, 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 the 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 2018, all existing business booked before October 1st 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.”

Many third- party planners took to social media to air their grievances, in light of the announcement.Andy Hammond, Director of Elite Events Connections said in response to the letter from Hilton: ” It was a patronising email we received, the big hotel groups are trying to do away with commission and then have the nerve to call us valued customers!”

Hammond responded to the email from Hilton with the following reply: “Well this is a lovely kick in the teeth to all us agents out there that bring you business. You don’t pay commission on anything but bedrooms anyway but I’m really trying to think of the incentive in bringing hotel groups like Marriott and Hilton future business… “Your memo starts with “Valued customers” – I don’t think we’re that valued do you? You might want to rephrase that rather than patronise us with such a blazing contradiction.”

Hammond highlighted his disappointment with Hilton’s decision in North America, stating that the big brands appear to be, “holding hands,” and are prepared to squeeze small agencies out of business. Hammond said:

“The bigger thing to do would’ve been to not follow Marriott and make a decision to support us here in the UK.

“We supply a large stream of business to North America and it’s bad enough that we’re not rewarded with full commission on everything; now you’re intent in squeezing commission from accommodation too.

“I’ll reiterate that I’m a big supporter of Hilton and out of all the major hotel brands they are the one we book the most. I have nothing to complain about here on the U.K. and Europe but it saddens me that in North America and Australia they are so short sighted and unprepared to reward agencies who bring them business.”

The announcement follows Marriott’s announcement in January that it would cut commissions, which led to third party meeting planners withdrawing their business.

Following Marriott’s announcement, several hotel chains such as Kimpton, Public Hotels restated their commitment to the industry standard ten per cent commission. Millennium Hotels showed their commitment by offering a commission of 12 per cent.

Other hotel groups went on to launch promotions which offered intermediaries an 11 per cent commission and reward points for bookings. Preferred Hotels increased their commission to 12 per cent for a time after the Marriott announcement.