Industry Insights

For a long time a trillion dollar trade has been sitting on a powder keg – and it might’ve just sparked. On what was initially a routine video call last August, Kathy Boate, CEO of the London-based agency Cartology Travel didn’t mince words when the subject of commission processing came up. “You should look into Onyx,” she urged. A few days later, Stacy Hope Small, CEO of Elite Travel Club of Santa Monica, posted on LinkedIn what was effectively an open letter to the industry: “Dear Hotels (and DMCs)…please find a better way to process commissions than Onyx...” Her post tagged industry leaders and aired specific grievances, mostly concerning delayed payments and the perennial difficulty of collecting commissions. Her thread went viral, with heated comments from agency owners and advisors across the globe voicing similar complaints and criticisms about significant delays in payment processing. It also included discussions about net vs. commissionable rates, igniting an industry-wide debate years in the making about how commissions are processed. This long-simmering issue came to a boiling point in 2024 in the luxury segment after a busier-than-usual summer. Most agencies that survived the Covid pandemic have since recovered, and many are now asking themselves the same pressing question: “Why are we still doing business like this?” This is the basic question that vexes good business partners alike at hotels, DMCs, and other companies that encompass the industry – and one that has ultimately led to a giant game of recriminations and finger pointing. Every player in the industry is close to desperate to figure out whether there’s a better way to move money. What has been one of the more elusive challenges facing the industry has suddenly become one of the most pressing. An increasing number of high-end agencies (and their owners) are eager to find ways to reduce, and even eliminate, the single biggest pain point for their businesses: chasing commissions. Various businesses are banding together for support and advocacy. For example, the energetic Travel Sisterhood, the secretive The Alliance, and the informal collective of Baltic and Scandinavian agencies – all groups that each tout a collective buying power of at least $100 million USD or more per year. There are undoubtedly many more like them who similarly are composed of members from three major consortia: Internova, Traveller Made, and Virtuoso. But if agencies are uniting independently of the consortia, this raises the question: what are the consortia doing to regain leadership on this issue? That’s the question that LuxuryWise has posed to three consortia heads – specifically Angie Licea, President of Internova’s Global Travel Collection (GTC), Quentin Desurmont, President of Traveller Made, and Matthew Upchurch, CEO of Virtuoso. It’s no secret that the Traveller Made community has been championing the use of net rates – with what appears to be a fair amount of success among travel businesses since the consortium has grown enough to launch its new Takumians brand early last year, expanding beyond its 600-agency flagship brand, Serandipians. “We negotiate [net rate] contracts with our suppliers so that our member agencies don’t have to wait for their commissions to be paid. We’re happy to report that now about 50% of our suppliers do it this way, but we of course want to increase it,” said Desurmont. “We think things will go in the net rate direction,” said Jacey Jones, Co-Founder and CEO of Trip Suite, a self-described “data warehouse” whose software includes a CRM, commission tracker, accounting, and other features catering to luxury travel agencies. “On average, less than 10% of bookings from U.S.-based agencies use net rates, which represents a huge opportunity.” While American agencies might hesitate to restructure their businesses to do more net rates, Jones thinks it’s only a matter of time before the process is demystified and U.S.-based agencies operate more akin to ones based in other countries. It sounds like a no-brainer – marking up trade rates to get paid instantly upon time of booking rather than going through a third party and waiting for commissions to process. However, net rates come with increased risk and liability when an agency begins to handle money. That’s when regulations start to influence how to do business, and laws widely vary by country. “As a travel advisor, mitigating financial risk is a priority," said Duncan Greenfield-Turk, a UK-based travel expert specializing in U.S.-based clients. "Rather than directly handling behind-the-scenes financial transactions, I prefer to work with established partners, such as hotel brands, in-country DMCs, or tour operators that have the infrastructure to manage payments securely. This approach ensures a seamless client experience while allowing me to focus on delivering exceptional service, with our commission or mark up settled on the back end,” he elaborated. The highest portion of an agency’s total bookings made with net rates ever reported to LuxuryWise is 70%. While this particular, high-profile agency is bringing in most of its revenue as soon as it books, that still means even a premiere-level travel design business must spend time chasing down almost a third of its revenue. That puts a lot of undue stress on business relationships. By contrast, the vast majority of luxury travel agencies are small, boutique businesses where the stakes are always high and the clients are always demanding. Small agencies understandably worry about taking on so much financial risk, where one mistake could break their business. Isn’t offloading that risk to a third party worth waiting for the commission? Despite the lack of clear, actionable solutions, the answer from many actors across the industry is a loud, resounding “No.”

While it’s not the only vendor, Onyx handles the vast majority of payment processing for the travel industry. Originally created in the early 1990s by a group of hotels seeking to streamline payments, the idea is a good one even if its technical execution has failed to keep pace with an ever-growing deluge of data. Globally, agencies report significant delays and a lack of data clarity between payment processors and hotels. These ingredients seem to have created a shadow game between intermediaries, that whoever holds onto commission funds the longest can bank the time value-add. Ultimately, agencies claim to be losing out on a lot of money due to delayed commissions.

That’s a cost that comes on top of the expended time and effort to chase commissions, not to mention the additional fees for foreign exchange and other services third parties tend to charge. “I waited two and half years for a commission payment when I first started. You just can’t run a business based on that structure, and I’m not the only one,” according to one U.S-based travel advisor, who prefers to stay anonymous.

“My conversations with Onyx have been very disappointing,” said Little Emperors CEO and Virtuoso Member, Rebecca Masri when asked about her experience reconciling payments. It’s a statement which is echoed by agencies worldwide and that highlights one of their core frustrations: lack of recourse. “I’ve been in communications with Onyx, and will be meeting their new CEO this week. I plan to inform their new CEO ‘that you’ve been labeled by a growing number of agencies as Public Enemy #1,’” said Virtuoso CEO Matthew Upchurch. “I'll share with him that we have been approaching the lack of progress with previous leadership in several ways. And that the lack of progress and robotic answers of the past have unified our sector to put pressure on our hotel partners, who invest heavily in us, to force improvement or find alternatives. Secondly, we believe that competition is good and therefore have given start-ups feedback to create better solutions."