The pandemic has led to a number of vast changes in the travel industry. Volumes during this period have been low and optimism on a sustainable rebound can change from week to week. Until recently, we have seen some positive news from various sources on flight bookings increasing as well as hotel.
We are seeing a gradual increase in the number of hotel bookings being made, although there are still hiccups in the industry. September this year was inconsistent as some TMCs/agencies had significant gains in bookings and others actually had fewer bookings.
If hotel pricing increases, then hotel commission should be increasing assuming that hotels are paying commission. That’s an assumption in the industry. Unlike other financial compensation from other industry partners like airlines or GDS, hotel commission payments may be delayed or unpaid, in which case we must request the hotel to provide commission. There are companies that specialize in chasing after this commission, to go after hotels that have neglected to pay commission, whether it be intentional or not.
Don't miss revenue opportunities
Across our dataset, we see that on average in the last 2 years, hotels only paid 82% of the time, even if an agency made attempts to recover the commission. Although hotel booking volumes are still low, it can be very impactful to the bottom line to miss revenue opportunities. And it can simply be a result of not having visibility on which hotels are paying and which are not. In fairness to the hotels, it might be the case that they no longer have the staffing to adequately send payment to their industry partners. Most in our industry have been hit by furloughs and layoffs. And now that business is returning, the challenge is bringing back those seasoned professionals or hiring new people.
Even so, it seems that some hotels have more of a chronic problem in paying their agency partners. Across the Grasp dataset, we see that various hotels are notoriously bad at paying commission. Some hotels never pay commission, including in popular corporate and leisure destinations like Las Vegas. A hotel on one side of the Strip doesn’t pay commission and across the street, another does. And perhaps surprisingly for those that did pay, most paid usually within a 30-60 day window. Speed-to-pay slowed slightly from an average of 48.4 days in the last 6 months of 2020 to 49.2 days in the first half of 2021.
It is worth noting that as a general rule, there is no pattern on which hotels pay and which do not. It seems no matter the region, hotel brand, or booking channel that receiving commission compensation is all over the map. For those who rely on commissionable hotel revenue, it is important to account for commissions quickly when they come in so you can focus on going after commission from those hotels that are not paying. Or better yet, don’t book hotels that are not supporting your business. It may be time to shift the tide and alter the status quo to truly dig into the details, to support only those hotels who support those who support them.
The GraspHOPR product is a technology that helps change the conversation around hotel commissions. Rather than assume payment of commissions or chase after hotel commissions in the hope of getting paid, just do not provide bookings to those hotels. GraspHOPR shows you hotels that are not supporting your business and those that are so you can make better choices to your bottom line.