Hilton Worldwide has followed Marriott International’s lead, announcing that it will drop commissions for third parties from 10 percent to 7 percent on all new group bookings at properties in the U.S. and Canada.
Hilton’s brands include Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Curio Collection, DoubleTree, Embassy Suites, and others. Hilton Hotels & Resorts alone has 540 hotels worldwide, with 275 in the U.S. and 13 in Canada, including such notable meeting properties as the Hilton Anatole in Dallas, New York Hilton Midtown, Hilton San Diego Bayfront, and Hilton Hawaiian Village. The change will go into effect for meetings and events booked after October 1.
A company spokesman said a rising price tag on group distribution is behind the change. In addition to commissions, hotels are seeing increased costs for reservation technologies, housing bureau services, and loyalty programs.
Marriott’s commission cut, which goes into effect March 31, sent shock waves through the industry when it was announced in late January, as many third parties rely on commissions for a major portion of their revenues, and many third-party clients take a share of those commissions to fund their meetings programs. In a MeetingsNet survey that will be released April 1, 42 percent of independents said they earn the vast majority of their revenues (81 percent to 100 percent) from commissions—only 7 percent don’t earn any commissions at all.