Commission is an important part of the travel industry and particularly the Meetings Industry. Many MICE companies of all sizes depend on commission and quite often commission only as their income.
What happens when hotels and other venues offer booking incentives to independent agents and others who depend on commission to earn a living.
There are several scenarios a property offers –
- pay for 9 Day Delegate Rates or rooms and get 1 free
- a free cocktail on arrival
- commission of 15% instead of 10%
Each of these examples has upsides and downsides when you are commission dependent.
Let’s look at each separately and then the picture as a whole.
You are booking an event for 100 pax at £100 DDR per head. That means that on 10% commission you would be earning £1,000. With the pay for 9 get 1 free scenario you are looking at the loss of £100 which could hurt.
A free cocktail on arrival is the least painful of the options above. Few properties would give you commission on arrival drinks so getting them free just gives your client a feel good factor of both you and the property.
The final example indeed means that your take home is £1500 instead of £1,000. Nice on the way to the bank but maybe not as nice as it looks on the surface.
Many people and companies who are commission dependent work without contacts between them and their clients. The contract is between the property and the client. The agent/company gets the commission either as specified in a clause in the contract or with a side agreement between the agent/company and the property.
The question is really one of choosing to have more now or to plan for the future.
In the days that I did the training of the International Associates for Helms Briscoe, I used to teach them that the most important thing that you can do is recommend the right property for the event and the client. Is the loss of £100 or the extra £500 worth losing a client?
My practice then and now with my own company Venue Guru International has always been to present my clients with just the facts. I don’t mention how much my commission is nor do I push one property over another unless there is a really clear reason to do so – size of conference space, style of catering, ease of airport access… If it means losing £100 or even £500 on the booking but means that the client comes back over and over again then it is worth every penny of the short term loss.
CTS can help you with all sides of your commission issues – leisure, business or MICE. Contact us to learn how.