Two of South Africa’s top hotel groups are following in the wake of South Africa’s airlines in their decision to stop paying travel agent’s commission and to charge a single nett rate for accommodation. This breaks a long tradition of ‘rack rate’, where accommodation establishments published the price of a night’s stay and then allowed agents to take a commission when they booked a room.
Generally, the more business an agent or tour operator did with an establishment, the bigger their commission. According to Brett Dungan, chairman of Fedhasa (The Federated Hospitality Association of South Africa), Southern Sun hotels and Protea hotels will be charging nett rates as from the end of April. Travel agents booking accommodation at these establishments will then charge their clients a service fee to make their living.
In this way, tourists can bypass travel agents and be assured of the cheapest rates simply by booking through an establishment’s website. Although one high-level hotelier described the issue as “an industry hot potato” to the Kruger Park Times, Dungan says that this has been on the cards for at least three years.
He claims that the change is driven by the travel agents, who would like the hotels to operate in the same way as the airlines, so that their billing follows one system instead of two. Dungan commented that “at the end of the day the agents are making more money than before” from the airlines. He added that a lot more hotel groups are likely to follow the example set by Southern Sun and Protea in future.