Omni Hotel and Resorts, a private company, has kept the 10-percent rate, but didn’t reveal much with its statement from Dan Surette, Omni senior vice present of sales and marketing:
“We continuously evaluate our distribution channels and associated costs,” he says. “Through our strong relationships with group intermediaries, we have received positive feedback from them about our position in the marketplace. We value these relationships and see them as an extension of our team. Their knowledge of the industry and the business they bring to our hotels and resorts throughout the year are greatly appreciated.”
When pressed for why exactly Omni chose to hold the line, Surette says, “Because we felt it was the right decision for our business.”
Rachel Lunderborg, Global Director, Solutions & Analytics with CWT Meetings & Events, explains what clients can do to mitigate the impact of these commission cuts. After all, like Lukasak says, third-party housing companies can only control how they react to the commission drops. She says control management strategies should get a fresh look.
“This includes putting in place preferred agreements with suppliers and focusing on other terms and conditions,” she says. “It’s really about negotiating hard over the business terms to make up the difference from the reduction in commission. Organizations have to refocus their volume and spend to those suppliers who have not cut commission. That’s where you can make a difference.”
In the meantime, boutique hotels have, in general, held the line. Dream Hotel Group recently announced it would maintain a 12 percent commission through 2019’s first quarter.
“The response we received from increasing the group commission was so positive, that extending the 12 percent commission … was a no brainer for our team,” says Jay Stein, chief executive officer of Dream Hotel Group. “As a company, Dream Hotel Group recognizes and values the important role our intermediary partners play in attracting group business to our hotels and we are proud to continue to support and maintain these long-standing partnerships.”