Ghost commission

How does a ghost commission happen?

"Ghost commission" is our own label. The mechanism behind it is well documented. Hotels pay commission on group business to whoever the contract names, and that money comes out of the rate. Site selection firms often work "at no cost to clients, as those making the selection receive a commission from the property that confirms the business" (Skift Meetings).

The commission becomes a ghost when a party you never agreed to pay takes that cut. Coverage of the 2018 commission cuts described third parties that "share revenue (i.e., write a check) for the privilege of sourcing a group's bookings", with commissions "often undisclosed to the attendee paying for the room" (Velvet Chainsaw, adapted from PCMA's Convene).

Sourcing tools muddy this. A Meetings Today legal Q&A names Cvent as a platform the hotel pays commission to. Cvent's own FAQ says it "does not collect any commission on sent or awarded RFPs." The two may describe different products, but an agency reading both can't tell who gets paid.

What does it cost when it goes wrong?

When Marriott cut intermediary group commission from 10% to 7% in 2018, "many independent planners watched their revenues suddenly drop by a third" (PCMA). Those are North American figures. Meetings Today flags a second risk: without an agreement on how a third party is paid, "the group may be ultimately liable for payment."

What should you check?

In our view, a group contract should name the commission recipient and percentage, and any sourcing tool should state in writing whether it takes anything from the hotel. Check both alongside the attrition clause. Our longer piece on ghost commissions in group hotel bookings goes deeper.