Marriott International cuts commissions for group bookings
Marriott International is cutting commissions for group and meetings bookings.
In a letter to all travel partners, the group will slash the commission rate from 10% to 7% for bookings at all hotels in the US and Canada.
The reduced commissions take effect from March 31, 2018.
Distribution costs are growing faster than revenue, Marriott says.
"These costs are limiting our ability to invest in meeting products, experiences, and innovation. Changing economics in this segment, plus these growing costs, required us to re-evaluate our intermediary compensation model," it wrote.
"Many corporations and organizations rely on group intermediaries for sourcing, contracting and planning meetings and events," the company added. "We understand the value these third parties bring, and they are also important business partners to Marriott."
The American Society of Travel Agents plans to meet with Marriott to discuss the changes.
"We are disappointed in the signal that a cut of this magnitude sends to the broader agency community. Travelers—individuals and groups, corporate and leisure—are relying now more than ever on trusted agents to help them sort through a multitude of travel options and get the best value for their travel dollar. In our view, a 30 percent cut in intermediary compensation diminishes the value of the role agents play in this complex and ever-changing industry," said ASTA president and CEO Zane Kerby.
"We plan to discuss this change with Marriott, our agency and consortia members and other stakeholders with an eye toward ensuring positive business outcomes for all involved."
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