Winning the Commission Cuts Battle
Aug 1 2018
Hotel commission cuts are still a hot topic, in fact, many of the 3rd party planners and their clients will start truly feeling the repercussions of this loss in revenue with events contracting their room blocks after the deadlines imposed by Marriott, Hilton, and IHG.
Change disrupts all industries at some point and it is up to us to evolve the way we do business in order to stay relevant.
Many planners have mentioned time as being one of the bigger challenges in wake of their hotel commission cuts. Understandably so, as now planners are spending more of their time negotiating with hotels and building relationships with new hotel sales/revenue managers. At the end of the day the planners first priority should be to satisfy their client’s needs. So how should meeting planners go about doing this and still manage to reach their own revenue goals?
Start by looking at your service fee structure to your clients. Planners could consider offering their clients the commission and rather move to a fixed straight fee for a specific service model such as a fee per reservation or a fee per room night booked.
Offer your clients an a-la-carte menu of services with some carrying an additional fee. Give your clients a clear breakdown of the services you are taking care of: answering questions on the phone, cancellation processing, creation and management of sub-blocks, attrition management and all the hours it takes for each task. The time you spend on the requested service is then justified by the fee charged. When you are able to save your client money on concessions and other discounts (mentioned below) they are more likely to pay your desired fees.
When a housing system is placed in a prominent position on an event’s site and possibly integrated with the registration process, it makes it easier for your attendees to move seamlessly through the process of registering and booking their hotel room in one go. If possible brand the registration and housing systems to match so the attendees feel as if it’s one transaction.
Better utilization of the reporting in your housing system will allow you to track who and what is in your block and make it easier for the attendees to get in. Having a housing software with a streamlined reporting system can assist with keeping track of your commissions and rebates as your event picks up rooms. Accurate reporting leads = better block management = ideal attendee experience = rooms filled = revenue!!
It’s time to get more value out of your hotel contracts to help compensate for the lower commissions – if you don’t ask, you don’t get! There are many other revenue avenues to explore when it comes to getting more out of your hotel contract.
Heads in beds – Spend time negotiating a comprehensive complimentary policy that includes an appealing complimentary room ratio based on your provided business and a push for a few added bonuses such as suites, staff comp rooms, and free pre-planning hotel stays. You should be aiming for a 1/35 ratio at least. More upgrades are always a bonus too.
Other Concessions – If you are using the hotels meeting spaces over several days (including a substantial amount of food and beverage) then ask for the rental fees to be dropped. Negotiate some discounts on banquet menus as well as meeting place audiovisual services. Complimentary wifi, free amenities for VIP’s or extended group rates are just a few of the many concessions that planners can negotiate with the hotel.
Commissions – Find your commissions in other places can easily offset other asks especially when you are coming in way over the minimum required by the hotel. Ask the hotel to give you their per-day minimum requirements as these may vary during different times of the year.
Rebates – Hotel rates fluctuate based on demand. Set your rebate amount based on your specific company financial needs (using integrity of course). If a hotel wants your business they will be willing to swing a bit closer to meet your needs as even if they fall under corporate commission cuts and other decisions they still have the freedom to decide the rebates on their own. Read more tips to negotiate better hotel contracts
At the end of the day, your hotel wants your business and your clients want your services. Figure out the optimal path to deliver the business to them and they, in turn, will be able to justify the changes to the current environment. Your job hasn’t changed, it’s just the way you structure your professional situation that might need a little tweaking
Worry less about commission and more about bringing new business! Show a deep understanding of your client’s needs and offer them awesome solutions to ensure repeat business. Meetingmax is all about Deep Understanding, Awesome Solutions, and Ridiculously Remarkable Support.Our team is ready to answer any further questions you may have around housing revenue with Meetingmax.