Marriott International recently began providing travel management companies and more than 20 Airlines Reporting Corp.-accredited Corporate Travel Departments with monthly, consolidated global hotel commission payments. While these efforts are appreciated by agencies and CTDs, they are by no means unique.
Using an International Air Transport Association number as a "parent" location, Marriott takes all global commissions due to an accredited Corporate Travel Department or agency, and rolls them into one monthly, consolidated check written in the company's preferred currency, explained Fred Miller, vice president of global sales at Marriott International. Payments include such details as taxes and room-service charges.
Starwood Hotels & Resorts operates a similar commission payment program with twice-monthly payments in 41 currencies though all Sheraton, Westin, Four Points, Luxury Collection, St. Regis and W properties. Hilton Hotels Corp. administers weekly central commission payments, though that might change following the completed acquisition of Hilton International this quarter.
Additionally, Frances Kiradjian, president and CEO of CCRA, a preferred rate hotel and travel agency services provider, said her company is developing a similar tool to collect hotel commissions that she hopes will make her company into the Airlines Reporting Corp. of the hotel industry. "Clients spend a fair amount of time chasing commissions," she said. "It's so disjointed, there's just not one place to go. The average from what we found in our surveys is that agencies collect about 60 percent to 65 percent, max, of the commissions they book. I don't know if that number is good across the board, it's just what our agencies tell us."
Several travel management companies said they would prefer to receive monthly hotel commission payments due to the clarity and efficiency of processes that would likely result.
John Smith, president of Tower Travel Management, has not used Marriott's system but said such a program would make agency operations "infinitely" easier and correct an "inherent disconnect" in the relationship between hotels and travel management companies.
Comparing the traditional hotel commission payment system to an agency writing an airline ticket, Smith said, "We are the trigger, so we set in motion the steps that end up in the airline getting paid and the client paying their bill and processing that. We are able to specifically track what the exact amount paid was, how it was paid, and then ultimately, because the GDS gives us actual flight data, we know if the customer traveled or not. In the case of hotels, we don't know what happens on the road. We don't know if Mr. Smith actually stayed in that hotel that we booked for him because we're not the ones transacting the money. So in regard to a global hotel payment system, I have no doubt that Marriott can execute that very well. It would work very easily."
Reconciliation also would benefit from a global hotel commission payment system, said Marc Casto, president and COO of Casto Travel. "For hotels that are consistently late, there's no shortage of instance where the resolution of collecting commissions can be more expensive then the commission being paid," he said. "The mechanism to resolve outstanding commissions can cost more."