Marriott Commission Cut on Group Bookings Could Ripple Across Hotel Industry
Skift Take
Marriott will use its formidable presence in the North American hotel market to squeeze travel agents and meeting planners. The big question is whether competitors will follow suit. Could Marriott be setting the stage for a full-blown commission cut on all hotel bookings that would completely disrupt the travel sellers?
When Marriott International acquired Starwood Hotels & Resorts in 2016, many predicted that the combined giant would use its market power to put more pressure on intermediaries selling their rooms.
Marriott CEO Arne Sorenson said last year that the chain had placed legacy Starwood brands on Marriott contracts, leading to lower commission costs paid to online travel agencies.
But now we have further word in 2018 that Marriott is taking overt, public steps to further cut commissions.
Marriott International will reduce commissions on group bookings to 7 percent, from the current 10 percent, on March 31 for its U.S. and Canada hotels. Contracts signed before March 31 will still receive 10 percent commission, according to a letter sent to travel partners this week, and the cut will affect travel sellers across all regions.
“Marriott’s group distribution costs are growing faster than our group revenue; these costs are limiting our ability to invest in meeting products, experiences, and innovation," reads a portion of the letter. "Changing economics in this segment, plus these growing costs, required us to reevaluate our intermediary compensation model. We are introd
