COMMTRAK CORPORATION Hotel Commissions... Managing for Maximum Yield Roger Miersch GlobalWare Big League Users Conference January 30, 2002

COMMTRAK CORPORATION Delivering missing and unpaid hotel commissions to travel agencies The only outsource firm concentrating on “after-market” collections Overview - since Specializing in hotel commission billing and recovery services

Managing for Maximum Hotel Yield The Current Marketplace Commtrak Services Issues…Overcoming Objections The Message

The Current Marketplace The hotel industry’s existing commission payment formula to agencies is likely to continue in the near term due to a number of factors... The Good News...

Factors… 2. Agency distribution costs for hotel firms are a smaller % than for the airlines 3. Pre-existing commercial net rate programs already permeate the industry 1. Absence of hotel oligopoly…many ownership, franchise, management groups

The Current Marketplace Don’t assume a 10% commission yield on hotel sales Realistic hotel commission yields* of 5% to 8.5% are still way ahead of current airline yields of about 3.76% (ARC, June 2001) *Gross commission divided by recorded hotel sales The Bad News... The Better News...

Hotel Commission Yield Variables Difference between “actual” and “recorded” bookings… inflates yield perception 1. Number of unrecorded cancels / no-shows 2. Number of duplicate records & agent errors 3. Number of net rate bookings 5. Effectiveness of reconciliation and recovery efforts

Commtrak Services Supplemental billing services…not primary reconciliation Data extract from GlobalWare Over 60,000 properties in data base / QC utility Professionally printed, mailed invoice documents

Commtrak Services Accurate posting to your file of all hotel responses Repetitive pursuit of unanswered bills for up to 24 months Delivery of quarterly reconciliation file and $ check for recovery share

Commtrak - Benefits Revenue to your agency is incremental since we only pursue records that you or others have closed Financial arrangement is contingency based, and incurs no direct cost to your agency Insures the maximum level of hotel income

Overcoming Objections “There’s not enough uncollected hotel commission for me to worry about.” The return is in real dollars, and can add significantly to your annual hotel income Can any agency today afford to overlook existing, legitimate income sources?

Overcoming Objections “My agency manages commissions and bills unpaid hotel records. I don’t need a 3rd party billing service.” If you bill any item more than once or twice, your costs will probably exceed your potential income Using aggregate customer invoices, our per item costs are significantly less than any agency program, and we will deliver revenue missed by your system

Overcoming Objections “I’m too busy putting out fires and managing other issues to address hotel recovery right now. Contact me in 60 days.” In 60 days there will just be another crisis, but the overdue commission items will now be that much older, and with diminished value A Commtrak program is easy to implement, and easier to maintain

Overcoming Objections “My agency uses a 3rd party reconciliation firm that also bills unpaid hotel records. We don’t need a separate recovery firm.” Other 3rd party firms focus more on primary reconciliation, and usually stop billing after 180 days Many of our customers first use other third party firms for the primary reconciliation We will invoice well beyond their normal billing cycles, and will generate additional hotel income

The Message You have an untapped pool of hotel income Tapping that resource costs nothing Program implementation is simple Additional hotel revenue will be delivered

Commtrak... Roger Miersch at: GlobalWare data extract steps: Scofield Management Systems For more information