Withholding payments and commissions is unacceptable and is a major threat to cashflow and future relationships. As we all know, cash is king”, says Lex Butler, Chair, HBAA
“We’re extremely concerned by many recent reports from agent members that some hotels and venues are making the decision at property and group levels to withhold payments at the moment,” says Lex Butler, Chair of HBAA. “It is unacceptable and needs to be addressed immediately as it seriously threatens the cashflow of the agents and the future of relationships. This crisis is a time to work in partnership and stand united.”
The examples reported involve national chains, medium sized groups and independents, and several of the payments owed amount to tens of thousands of pounds. Often the bookings have taken place and the venue has already been paid and enjoyed the business.
Jonathan Ashley-Cowan, Managing Director of PRIORITY is one of several agents who have spoken out about this issue. “During these tough times it is vital that our industry works as one to make sure that we all come through this in the best possible shape. To achieve this, we need everyone to be remunerated for the work they’ve done and for every organisation to maintain as much of a cashflow as possible just to pay staff and keep going. Not making payments due is just wrong.”
Chris Peacock, Director of Conference Care, said: “The fact that some hotels/venues aren’t considering the payment of commissions owed to be a priority is very disturbing. Venues have a responsibility to the agency community to make good on their commissions for revenue they’ve received.” Susie Christie, Director of Infotel Solutions commented “This is a huge concern, both for now with cashflow but also for future relationships and business moving forward.”
Inntel is one of several agencies who have been told by hotels/venues that they are unable to process commissions due to the accounts department being closed or furloughed. Douglas O’Neill, CEO of Inntel said, “While we completely understand the difficult decisions all businesses are making at the moment, wherever possible Business Critical functions like accounts receivable and payable should be kept open to ensure everyone can carry on as much as possible in these unprecedented times.”
Commenting on this, venue member Ben Hioco, Sales and Marketing Director of Countrywide Hotels said “If there is a problem, rather than leaving the agent chasing or ‘in the dark,’ the hotel/venue should pick up the phone and enter into dialogue and, if necessary make a partial payment now and agree a reasonable date to pay the balance. This is a testing time for relationships and we shall only get through it together if we maintain communications.”
Louisa Watson, Director of Marketing for Wyboston Lakes Resort agreed, saying “The relationship between agencies and venues must remain open, honest and fair. We need each other and if the hospitality and events industry is to come through this major threat to our future, then we must operate legitimately, as partners.”
Continuing the theme of partnerships and looking ahead, Ben Hioco of Countrywide Hotels commented: “Like many hotels and venues we rely on agencies for a large proportion of our bookings and when the recovery starts we will need them more than ever. When we have funds we can release payments, but it is short-sighted to treat agents badly and not pay them.”
Jonathan Ashley-Cowan of PRIORITY observed: “This is a time to maintain relationships and demonstrate that we are not just ‘fair weather friends,’ to ensure that we are not damaging long term relationships for short term gain. We will all rely on each other even more when the upturn comes, when those that have stood together will work together and be stronger for it.”
Julie Shorrock, Managing Director of HTS Ltd also emphasised the importance of maintaining relationships. “As with all our industry colleagues we are navigating through this current business climate, which affects agents and hoteliers alike. These are the partnerships and collaborations we need, that we have nurtured over the years, and are currently working hard to support while at the same time staying operational and in business for the future. It’s imperative we all do the same and work together.”
Remember where business comes from
Jacqui Kavanagh, CEO of Trinity Event Solutions commented: “Co-operation, partnerships and looking after one another are particularly vital now. Agencies will have plenty of business to place when the recovery begins. Even now we have major bookings to place for 2021 and beyond.
“When placing future business, we’ll remember those venues and partners who really go above and beyond and make a very positive contribution to our successful journey out of this situation.”
Agents also have a duty to pay hotels and venues according to agreed terms and several have reiterated their commitment to this for the good of the industry
Nick Scott, Managing Director of arrangeMY says “We recognise the importance of keeping the industry and its finances moving. We have no plans to delay any payment to our suppliers and would hope that all organisations recognise the value of long-term relationships”
Julie Shorrock confirmed that “HTS is committed to continuing payments to our hotel partners as before; we see this as critical to our business and our industry.”
Jonathan Ashley-Cowan of PRIORITY urged “all agencies and venues should not withhold monies from each other but keep the wheels of commerce turning.”
Lex Butler, Chair, HBAA, summed up “These powerful heartfelt opinions from so many agency and venue members demonstrate the commitment of both groups to working together to see the industry through this time of crisis. For now, and for the future, all hotels and venues, large and small, must look after the agents and treat them fairly.
“We recognise that agencies which handle billback may have outstanding payments to make to hotels, which in turn is affecting those properties’ cash flow and therefore their ability to pay agencies commission, so we’re asking agents to make sure they are playing their part by paying hotels and venues promptly.
“HBAA recently launched the Association’s re-worked Code of Practice, in which venues and agencies came together to drive forward with evolved business guidelines. Whilst we appreciate that we are all working in unprecedented times, the basic ethics of good working practices and fair approaches should be exercised more than ever right now and the HBAA does not endorse the withholding of commission payments. Our members benefit from referencing the HBAA Code of Practice and this should be upheld at all times”
“HBAA has written to its venue members to request that the withholding of commissions is stopped and that we work to the agreed terms; we must all remain #futurefit.”.