Jamie Biesiada
The timeliness of commission payments, or the lack thereof, is a big topic among travel advisors that has come to the forefront with ASTA's plan to publish a watchlist of hotels that advisors report as paying late or not at all.
Onyx CenterSource, a legacy player in commission payments, is often in the crosshairs on this topic, and the company says it is focusing on modernization and communicating with agencies about how the payment process works.
In September, ASTA president and CEO Zane Kerby said it has met with Onyx to discuss the issue. When he asked for a list of offending hotels, Onyx declined because it would violate confidentiality and data-protection agreements.
In October, ASTA Corporate Advisory Council chair Amanda Klimak said the council continues to have a dialogue with Onyx, adding that the company has shown a willingness to talk to the agency community and shine a light on the commission-payment process.
Tony Wagner, Onyx's chief commercial officer, said when an advisor reaches out to a hotel about a commission payment, the response often is, "We paid Onyx." But that's not always the case, as hotels often remit data first with the actual payment coming later.
Wagner also said Onyx is responsible for delivering "as great a transparency as possible to our agency customers." The company is discussing how to do that at the advisor level. It's challenging, Wagner said, because Onyx is not contracted with individual advisors, but with agencies.
He recently shared how Onyx processes advisors' commission payments, stressing one point: "People think we're holding their money and not paying them immediately. And I would say, with absolute certainty, that is 100% false."
When a hotel contracts with Onyx to pay commissions, there is a two-step process, Wagner said. They need to send both data on the payments as well as the actual money.
"Our ideal state is a hotel sends us the data and the funds at the exact same time, because that's the way to get the fastest payment," Wagner said. "And we've tried to provide incentives, in our financial models, that the hotel sign up for the fastest payment process, which is direct debit."
Hotels can also pay via wire, credit card or even check, but direct debit is the most preferred method, Wagner said.
According to Onyx, just 52% of hotels in countries where direct debit is permitted fund commissions via that method.
Once Onyx receives funding, it can submit the payment to agencies 72 hours later. Onyx typically pays agencies weekly. While it could pay agencies faster, he said, weekly is the most efficient process as it carries fewer banking fees than more frequent payments. Most travel agencies pay ICs once or twice a month.
Onyx's average payment comes 42 days after an advisor's client checks out of a hotel, according to Wagner, but he noted there are always outliers in either direction. The 42-day average was calculated in the third quarter and marks a slight decrease from 44 days in Q2, Onyx said. The company posts quarterly data, including average payment timelines, on its website.
Onyx also offers agencies commission reconciliation and chasing services. Through that work, Wagner said, the company has calculated that the average payment time is 140 days for hotels that don't contract Onyx to pay commissions.
To better communicate with advisors, Onyx has started including payment statuses in the files it shares with agency customers. It will note whether data and funding have been received as well as the payment status.
Onyx is also working with hotel chains to identify underperformers in terms of commission payments to move them to faster payment methods or to change their payment structure. Wagner said the company is adding currencies to its systems in regions where direct debit is now permitted.
Scott Gutz, Onyx's president and CEO, emphasized that the company is campaigning small- and medium-sized hotels to move to direct debit payments.
"We are actively working with hoteliers on all sorts of mechanisms to receive funds more quickly and efficiently," Gutz said.