Expotel has defended a new commission structure which asks
venues for 20 per cent commission in return for placing event business with
them – more than double the industry standard.
Venues have expressed their dismay at receiving the 'Rates
and Commission Agreement 2012' document, which also unusually asks for the rate
to be paid on the total invoice amount, inclusive of VAT.
Mark Bevan, head of partner services for Expotel – one of
the biggest booking agents in the country – said the 20 per cent rate actually
supported small and independent venues, because it enabled them to stay on a
level playing field with the chain operators.
"The big chains out there are being extremely
aggressive because the conference industry is on its knees at the moment in the
provinces, and they are coming up with some fantastic rates,” he said. “The
independents don't have to sign it. They can negotiate, or they can sign it and
put the price up at the front end. This is a fierce market and there is a
squeeze on all the agents - small, medium and large. We are absolutely behind
the independent base - we think it is something unique and we should look after
these smaller SMEs.”
However, one London
venue, which asked not to be named, told meetpie.com that the scheme was not in the best interest of the
client, who would be encouraged to book venues paying the highest commission
rather than the most suitable or those offering the best rate.
“We have always worked very well with agents, however will not
be paying these inflated rates of commission and urge other venues to take a
similar stand,” said a spokesman.
Peter Ducker, executive director of the Hotel Booking Agents
Association (HBAA) said he could not comment on individual commercial
arrangements between members but said deals came down to supply and demand.
“The industry standard rate of commission is between 9.5 and
10 per cent of the VAT exclusive rate, although market conditions and supply
and demand factors can influence this from time to time,” he said. “The
commission is like any commercial transaction – it requires both parties to be