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Commission payment should be standardised to avoid "short-sighted" practices

Dezika's Rachelle Valladares discusses commission in Future in 15 talk with Caleb Parker

Pictured: Caleb Parker speaks with Rachelle Valladares from Dezika, at the Future in 15 talk at US&Co

Commission is here to stay and needs to be standardised, it has been suggested during a Future in 15 discussion on the controversial industry topic.

Rachelle Valladares, regional director at commission collection company Dezika, said the payment system is the best fit for the events industry, adding that it would work even better if it was standardised. Valladares was speaking at the latest Future in 15 , hosted and moderated by Caleb Parker at London venue US&Co.

She said: "I think there will always be commission; I think transparency helps. As soon as you start talking about the charitable sector, associations, politics can you imagine the scandal if a major charity was paying a fee for their venue finding? It would be incredible. And so I think commission is here to stay."

Valladares' company Dezika collects commission on behalf of its agency clients. She said a standard commission system would help clarify things. "This would require organisations like Hotel Booking Agents Association (HBAA) and other global organisations to figure out a way to clarify what commission is paid on. In Europe we’re very lucky; if you work in Europe you get paid on bedrooms, DDR, meeting space and F&B and quite often on a number of others. If you work in Asia it’s bedrooms only. In the states it's also bedrooms only. So it really depends where you work as to what you get paid for, but the amount of work is the same."

Valladares described as "short sighted" the temptation for dishonest agencies to steer their clients' business towards venues that would pay them higher commission rates.

Louise Goalen, HBAA chair and Top Banana's head of venues, called for better education among venues, saying many don't realise the level of work agencies do to place business with them. She said HBAA was clarifying elements around commission, including the timeline in which it should be paid, in its revised code of conduct.

  • Rob Eveleigh 14/07/2017

    I agree that many venues do not appreciate the level of work that agencies put into venue finding, but neither do many clients who, because it is "free", are unable to quantify the work. In fact, as many venues automatically build in commission to their rates it could be argued that clients are paying inflated prices because of this.
    Rachelle Valladares assumption that paid-for venue finding could be perceived as "scandalous" is misguided at best, and I would argue that a company who has a vested interest in the survival of this form of payment aren't really able to provide a balanced perspective.
    I would also argue that a "standardised" commission structure would be anti-competitive at least because more than enough venues, both chain and independent, use enhanced commission as a promotional tool.
    Commission is an outdated and opaque form of payment and I am unable to find in favour of it against fee-paid work.

  • Hedd Adams-Lewis of Red Dragon events 13/07/2017

    Australia and NZ tend to only pay commission on DDR packages and group bedroom booking.
    In Europe, we find it depends on the country and the hotel group. Even then some hotel groups will pay commission in one country but not in another, or they pay on different elements.
    As for larger Exhibition & Conference Centers across Europe, we have found that German venues rarely pay any commission, even on business worth EUR 100,000+

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