IHG Joins Shift to Cut Third-Party Planner Commissions

On May 8, Intercontinental Hotels Group (IHG) became the third major hotel brand to cut independent planner commissions from 10 percent to 7 percent. The announcement follows the lead of Marriott International, which made the announcement in January to go into effect in April and Hilton Worldwide, which made a similar announcement in March to be effective October 1.

IHG’s lower rate will go into effect January 1, 2019 for properties in the continental U.S. and Canada. Senior Vice President of Global Sales Derek DeCross said in a statement that the move “allows us to balance the needs of our guests and owners by reinvesting the savings into programs and improvements that will benefit the guest experience.” He said the change is part of a “near and long-term strategy in order to drive an optimal experience throughout the travel journey…whether that journey includes a corporate customer attending an incentive event, or a parent booking his or her son’s soccer team.”

David Bruce, founder of the independent planner group Meeting Planners Unite and managing partner of Dallas-based CMP Meeting Services, questioned the motives of the brands who have made the change. “It is becoming increasingly more difficult to understand the logic in lowering the commission by these chains other than it is an attempt to increase their profit structure by cutting commission to those who bring them 60 percent of their business,” he said in a written statement. He pointed out that the hotels, for the most part, are not disrupting the commissions of the online travel agencies. “They pay far higher rates [to them] than the 10 percent they pay to their largest block of business (who also keep food and beverage, and other essential hotel income categories employed by our group business).”

Bruce said it is even more important for planners to “work toward a solution which is equitable to all involved.” His goal is to get the properties to negotiate with a collective of independent planners the way they do with large site selection companies, such as HelmsBriscoe.

IHG operates Kimpton Hotels & Restaurants, Holiday Inn and Crowne Plaza Hotels & Resorts along with InternContinental Hotels & Resorts. Similar to provisions issued by the other two properties, franchise properties could be allowed to put different commission structures in place. Bruce theorized that some might see the wisdom of maintaining the status quo. “We believe that these properties, when faced with the decision to either keep the 10% or lose the business will choose the higher commission option,” he said.

Some hotel properties, including Eden Roc Miami Beach, Nobu Hotel Miami Beach and Los Cabos, Plaza Hotel Casinos Las Vegas and Dream Hotel Group actually announced promotions to raise commissions as high as 12 percent. MGM Resorts International and Wyndham Hotel Group made statements saying they plan to keep group commissions steady for the near future.