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Affiliates Forum

    
Commission Rates - What is The Norm?
... branded hotel chains
austtr




msg:542081
 12:32 pm on Nov 24, 2003 (gmt 0)

I'm just starting out with affiliate marketing and my first sign-on was for 10% of completed business for holiday sector accommodation.

I am now looking at a hotel chain consisting of household name brands, predominently a USA operation but with several local properties. Their affiliate scheme is with BeFree and offers 3% of room rates on completed business.

That seems quite low but then I have no knowledge of what is typical. Can anyone enlighten me?

TIA

 

gosman




msg:542082
 2:30 pm on Nov 24, 2003 (gmt 0)

Hi austtr.

That is quite low.

[edited by: Drastic at 5:55 pm (utc) on Nov. 24, 2003]
[edit reason] Please see this forum's charter. [/edit]

mogwai




msg:542083
 11:04 pm on Nov 24, 2003 (gmt 0)

Hi austtr,

I think I know which brand you are talking about. I had a look at their program a few months back, the commission is very poor and the program is very restrictive in terms of usage of their brands in your site. It's almost like they are saying please sign up to advertise us but don't mention us in your site :)

I would advise you to go through one of the intermediary providers, some pay a starting rate of 6% on net rate bookings. You may be able to use the same hotels and receive double what the brand are offering!

There are more brands offering their own affiliate programs now. It's an effort to take control away from some of the more powerful intermediaries. Unless they can at least match the commission I don't think it's worth the effort.

Hope this helps

mayor




msg:542084
 5:22 am on Nov 25, 2003 (gmt 0)

3% for the very competitive industry of hotel bookings is a joke.

However, it's not the commission rate that counts, it's your earnings per click-though and your difficulty or cost in providing those click-throughs.

Some affiliate merchants can't convert your traffic to sales, so you just waste your time, even if they pay out 20% in commissions. Others work out OK in the 5-10% range because they convert traffic well.

Some merchants pay out well for one person, but not for the another because of differing approaches and targeting of traffic.

Still, I've not yet seen a program worth bothering with that pays less than 5% commission, in any industry.

austtr




msg:542085
 11:12 pm on Nov 25, 2003 (gmt 0)

Mayor.... thanks for that.

With such a low % plus the fact that we are talking about a regional area with a limited number of hotels, my initial response was that this would be a waste of time.

What I am not sure about is whether the pulling power of high profile brand names may be enough compensation to make it viable.

The only way we'll ever know is to trial it, so I'll run it for 90 days to see what happens.

cornwall




msg:542086
 9:04 am on Dec 14, 2003 (gmt 0)

"There are more brands offering their own affiliate programs now. It's an effort to take control away from some of the more powerful intermediaries. Unless they can at least match the commission I don't think it's worth the effort."

That is really the heart of the matter. All hotels want to reduce commissions, and this is one way of doing it.

Apart from IHG mentioned originally, has anyone got others that are going direct in the same way with their own affiliate programs?

mogwai




msg:542087
 6:09 pm on Dec 16, 2003 (gmt 0)

Accor hotels have a similar (slightly better IMO) setup to ICH. I don't know of any of the other big brands that are running their own programs. I would like to see some of the big players open up competitive, less-restricted programs. It's the only way they'll get control of room rates back from the major intermediaries.

cornwall




msg:542088
 6:56 pm on Dec 16, 2003 (gmt 0)

mogwai

Thank you for that info on Accor - it looks quite interesting.

Whilst I could do with 6% rather than 3% from IHG it does seem to work fairly well in income terms

I'll try the Accor program as well to see what that comes to in financial terms

IHG have some very strong brands so one seems to get a reasonable number of bookings, it will be interesting to see if Accor generate the same sort of convertion rates.

mogwai




msg:542089
 10:17 pm on Dec 16, 2003 (gmt 0)

No problem cornwall.

I used the Accor program on a large site I used to manage, it provided a reasonable amount of commission although we didn't push it much and the Accor site was awful back then. The European Accor brands are pretty strong.

Just out of interest have you seen [travelweb.com...] before? If this opens up to the affiliate market things could get interesting :)

cornwall




msg:542090
 7:40 am on Dec 17, 2003 (gmt 0)

"Travelweb LLC is a travel distribution company. Owned by Hilton Hotels Corporation, Hyatt Corporation, Marriott International, InterContinental Hotels Group, Starwood Hotels, priceline.com and travel technology provider Pegasus Solutions, Inc., Travelweb offers an innovative new method for the online distribution of hotel rooms. "

As you say interesting!

Blue_Fin




msg:542091
 7:41 am on Dec 17, 2003 (gmt 0)

Travelweb has an affiliate program through Performics. It started a couple of months ago.

As I posted at [webmasterworld.com...] IHG's commission is 5%, not 3%.

IHGhotels




msg:542092
 4:16 pm on Jan 9, 2004 (gmt 0)

I just noticed this board and appreciate the feedback on our affiliate program. Our program is relatively new and we welcome the feedback.

To be clear, our commission starts at 3% with a 7 Day "look back" period. (You receive a commission on sales that take place up to 7 days after you send someone to our site). This is a significant differentiator from other hotel affiliate programs. Most hotel affiliate programs have no look back period at all.

Affiliates have the ability to generate higher commissions with increased sales volumes and through special bonus and incentive programs
Affiliates earn full commission directly from IHG no splitting commissions with third parties.

Hope this helps.

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