Marriott looks to cut OTA commissions
The big online travel agencies are the next target for Marriott International as it looks to further reduce distribution costs.
It comes after the hotel giant cut commission for group bookings for its hotels in the US and Canada from 10% to 7%. The cuts, announced in January, came into force this month. Rival Hilton has since followed suit.
Marriott chief executive Arne Sorenson says Expedia Group Inc will be first and the company hopes to renegotiate commission rates later this year when they are up for renewal.
"We would certainly like to pay less. We will have to see how the negotiations go," Sorenson told Reuters.
It would be the first contract talks with a major OTA since the merger with Starwood Hotels & Resorts.
The now significantly expanded portfolio will give Marriott more bargaining power.
Its contract with Booking Holdings Inc is up for renewal in 2019.
Marriott says the large OTAs generate about 12% of revenue while the majority of business comes via direct bookings.
Overall, about 55% comes from loyalty members.
"We have seen significant growth in all digital channels…What has declined a bit would be travel agents, in part because people are moving online and doing things themselves," Sorenson said.
Sorenson was speaking at an event in India to mark the opening of the Sheraton Grand Bengaluru Whitefield, its 100th hotel in the country.
TravelMole Editorial Team
Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
Phocuswright reveals the world's largest travel markets in volume in 2025
Cyclone in Sri Lanka had limited effect on tourism in contrary to media reports
Higher departure tax and visa cost, e-arrival card: Japan unleashes the fiscal weapon against tourists
In Italy, the Meloni government congratulates itself for its tourism achievements
Singapore to forbid entry to undesirable travelers with new no-boarding directive