FROM AFTA’s chief executive, Jayson Westbury
Our friends across North America in the form of the American Society of Travel Agents (ASTA) and the Association of Canadian Travel Agents (ACTA) have both come out strongly against the announcement over the weekend by a large hotel group to cut commissions to travel agents (TD yesterday).
The detail, as I understand for now, is that the commission cut only relates to a group booking and that the rate will go down from the current industry wide 10% to a rate of 7%. How short-sighted is that? In the face of ever increasing disruption to the distribution of hotel rooms across the globe, the one thing you would think a hotel company would value is the travel agent indirect distribution channel and particularly for groups.
Groups are a key and underlying factor in the revenue mix of hotel bottom lines and I am not sure if this commission cut is some strange signal that they don’t want groups any more. More than ever, travel agents are the key drivers of group bookings – be it for meetings, incentives or events – and they have the absolute ability to influence a client’s choice of hotel when considering the best option for the program they are looking to run.
So like our North American friends, AFTA is clearly concerned to the real underlying reason why such a short-sighted decision could be taken. Any business needs to have a balance to their costs. Distribution is a cost that hotels have to bear and they, like all suppliers of travel products, need to make their own decisions about which distribution channel they value and which they don’t.
This has been and always will be the single biggest discussion point that goes on between travel agents and travel suppliers, not only in Australia but across the globe. It will be interesting to see how this latest decision goes.
My hope is that the broader global hotel industry continues to value all bookings from travel agents regardless of the type or source of the client. No doubt not a welcome decision by the global agency community.
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Source: traveldaily