Five Ways to Improve Your Revenue on Hotel Commissions

Blog ,
March 7, 2016
Reading Time: 3 minutes

There are a number of ways you can improve the revenue you make on hotel commissions.

There are many travel agencies and travel management companies (TMCs) that are outdone by the complexity of the process in collecting the commission on hotels that they are owed, meaning that their operations are often not nearly as financially efficient as they should be.

Hotels sometimes do not have an adequate system to pay commissions in a timely fashion, and even when they do the process can be bogged down by excessive bank charges. By outsourcing your commission handling, things can be made much simpler, as you can streamline your operations in a way that can substantially boost your revenues.

Get what you are owed

There are a number of reasons why travel management professionals are not paid the money that they are owed by hotels. These include oversight, system failure, lack of overview, or in some cases, even deliberately ignoring contractual responsibility.

The failure to collect commission is something that has had an effect on the whole travel industry, with an estimated 40 per cent of the commission owed by hotels never actually being paid.

This figure is perhaps unsurprising given the fact that there are a whole host of reasons why a travel management company would not pursue a certain case.

Many find that the time and cost of chasing commission is often too high for the sake of the amounts involved, meaning that many firms simply do not see the point in chasing it up.

An outsourcing company like Onyx is capable of compiling the necessary data to differentiate between the hotels that do pay what they owe and those that don’t.

Net Trans can then use this data to chase up those that remain reluctant to pay, meaning that your company can stand to gain an increase in revenue of between 20 and 40 per cent within the first year of implementing the service.

Stick with those that are reliable

With such detailed data outlining what hotels are paying up, it becomes easier for a TMC to build a good working relationship with certain businesses.

Those that do not pay the commission that they owe, can then be cast off from consideration, meaning that the hotels you do business with are the ones that are more likely to honor their contractual obligations.

By keeping hotels that see out such a commitment while getting rid of those that do not, it becomes much easier for TMCs to boost their revenues.

Lower administration

As well as placing more responsibility on hotels themselves to remain reliable, outsourcing commission handling can also help to reduce the number of extra hours worked by company employees.

Much of this extra time would otherwise be needed in order to negotiate the complex process of ensuring they take the commission they are owed.

This often involves the need to manually issue invoices to every hotel within a TMCs business portfolio.

This in itself can be hugely time-consuming, but the number of hours can be increased even further if there is a need to chase up any outstanding commission.

Onyx can eliminate this problem by handling all of the paper work for you. All your accounts department needs to do, is to forward any commission receipts sent to you by the hotels in your portfolio on a monthly basis.

This is known as the company’s commissions reconciliation service, which enables companies to streamline their operations both in time spent working and wages going on the extra hours that would otherwise be required from a TMCs workforce.

Lower bank charges

Because there is a need to manually invoice every hotel in a TMC’s portfolio, funds often trickle through on a seemingly sporadic basis, with each payment being the subject of bank charges.

These soon add up and can eat away at your revenues. With Onyx, however, this problem is solved by way of providing the income you are owed with just one payment each month, keeping bank charges down to an absolute minimum.

No exchange rates

Some TMCs may deal with hotels from all over the world, meaning that if they manually collect the commission they are owed, not only will it be hit by a number of bank charges, it could also be in a currency that is not preferable to your needs, meaning that your revenues could be harmed further by unfavourable exchange rates.

By outsourcing the handling of your commission to Onyx, you can be paid in whatever currency is convenient to you and your business.