Second major hotel chain will cut third-party planners' rate to 7 percent from 10
In the News
Marriott Will Reduce Group & Meetings Commissions
What led us to the decision was trying to balance [intermediaries, customers and owners] and make sure that we make a decision that made good sense for all. … And frankly, it also had to make good economic sense for the business overall.
Marriott International is reducing the commissions it pays to group intermediaries from 10 percent to 7 percent beginning March 31, 2018. The policy change will be a brand standard that will take effect at all managed and franchised properties in the U.S. and Canada.
Marriott global officer of digital, distribution, revenue management and global sales Brian King said the change is a "reset and rethink" moment for the company. "We've been looking at the demand that we're receiving from our customers and the amount of innovation that needs to take place in the group space from an end-user perspective, and then we've also been watching the pace of revenue growth and the pace of commissions, and they're just not commensurate with each other."
The policy may not come as a surprise to many in the meetings and events space, as fears that commissions would change have been growing the past three to four years, particularly in light of industry megamergers. One consultant speaking on background earlier this month, prior to any Marriott news, suggested the company had the power to do away with group and meetings commissions entirely. King, however, said that was never a consideration. "We're very, very committed to intermediaries and our partners, we're committed to our customers and we're committed to our hotel owners," he said. "It's a three legged-stool, and we are trying to strike the right balance that we can appropriately take care of each of those audiences, invest in the hotels appropriately so those customers can have experiences that they desire which will drive demand to our partners." But that consideration also had to make good economic sense for Marriott, he added.
