SOP Finance and Accounting – Group Travel Agent Commissions

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Processing Group Travel Agent Commissions

Purpose of Group Travel Agent Commissions:

On a selected basis a Group Travel Agent Commission may be paid to an individual, company, or third party who provided the hotel with paid group room business.

The Director of Sales is responsible for obtaining approval in advance from the General Manager for the payment of a group commission.

One of the key responsibilities of the SOP Finance and Accounting department is to manage the group travel agent commissions. Group travel is a significant revenue stream for many businesses, and travel agents play a crucial role in facilitating these bookings. As a result, it is essential to ensure that these agents receive their commissions accurately and on time.

To achieve this, the SOP Finance and Accounting team must have a robust commission tracking system in place. This system must accurately record all group bookings and the corresponding commissions owed to each agent. It should also be able to generate reports that provide a clear overview of commission payments made and outstanding.

The team must also maintain good relationships with the travel agents and promptly resolve any commission-related issues that may arise. This includes answering questions about commission rates, correcting commission errors, and addressing payment delays.

Managing group travel agent commissions can be a complex and time-consuming task, but it is essential for maintaining good relationships with travel agents and ensuring the financial health of the business. With a well-designed commission tracking system and a dedicated team, the SOP Finance and Accounting department can effectively manage this critical function.

Group Travel Agent Commissions SOP Procedures:

1. The General Manager must approve the commissionable booking based on profitability in advance. This commission is payable on consumed room rate ONLY, not food and beverage.

2. This commission will be coded to the appropriate Rooms Department Expense Account, not netted out of the group room rate.

3. The commission will be paid from the operating account. To release the check, the entire group function bill must be paid.

4. The check request from the Director of Sales should include the correct Group Room Pick-up Reports and a copy of the Sales Contract that states the group was commissionable.

Note: Group commissions are deducted from the Group Room Revenue when calculating any incentive or bonus award.

Training Summary Questions:

Q1. Who is responsible for obtaining approval in advance from the General Manager for the payment of a group commission.?

Q2. To which account will this commission be coded?

Q3. From which account will the commission be paid? 

Q4. What should not be included in the check request from the Director of Sales?

SOP Number: Finance and Accounting SOP – 30
Department: Accounts Payable
Date Issued: 8-Aug-2021
Time to Train: 28 Minutes

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