BUENOS AIRES -- Hyatt CEO Mark Hoplamazian said the hotel
company is thinking holistically, and not just about immediate cost savings, in
deciding whether to change its group commission structure.
At the end of March, Marriott cut commissions paid on North
America group bookings from 10% to 7% across its brands. Hilton will do the
same on Oct. 1.
Hyatt still pays 10% commission on group bookings.
"There's an economic reality," Hoplamazian said in an interview at
the World Travel & Tourism Global Summit. "The issue for us is not to
just treat it as a cost issue and say we'll follow because it will have a
reduction in this line item on our P+L. We are thinking about it more
holistically. What is the whole value equation? What is the net bottom line
result of how we go to market? That may or may not look like what Hilton and
Marriott have done."
Hoplamazian said that group bookings are "a big and important
piece of the puzzle for us," with group business in the United States
generating more than 40% of total room revenue. He called meeting planners and
travel agents "really important partners."
"We're not just going to focus on the cost of delivery,"
Hoplamazian said. "We're going to think about the total net impact of the
revenues that we're generating."