FOR corporate travel buyers, the rise and rise of the hotel booking agency at the back end of the last century was a win-win situation. Instead of getting a generic travel service,


they were enjoying the skills of best-in-class hotel experts who knew exactly what property would suit their needs and, what’s more, knew how to secure that property at the lowest possible rates. And they didn’t have to pay a penny for the service. Meanwhile, hotel booking agencies were


using their considerable popularity and clout to drive the best deals from the hotels and get


a really rather decent commission that kept their business model well and truly afloat. The hotels would fill their rooms and everyone was perfectly happy with the arrangement. But this joyful equation doesn’t take account


of the never ending quest that hotels, like everyone else, are on to make savings. With the recession still biting hard, the need to shave costs is paramount. So will commissions go the way of their airline counterparts and bite the dust over the next few years? HRS managing director Jon West says it’s not as simple as that. He argues that


commission is just one component of the distribution costs that hotels must pay and is actually the one that most obviously shows a decent return on investment. He explains: “It’s the cost of distribution as a whole that hotels want to drive down, a cost that includes commissions but also marketing funds, fees and overrides. What is happening is that hotels are making choices on their channels of distribution, on the costs of getting their product to the end user.” West adds, “These costs can be as much as 30 per cent. If a corporate is paying £100 which ➔


WWW.THEBUSINESSTRAVELMAG.COM I 63


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88