Marriott International plans to cut commissions paid to group and meetings intermediaries from the standard 10 percent to 7 percent for all hotels in the U.S. and Canada, the hotel company announced in a letter to group partners.
The reduced commissions are effective March 31, 2018.
"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," Marriott executives stated in the letter. "Changing economics in this segment, plus these growing costs, required us to reevaluate our intermediary compensation model."
However, the company said that its new approach would allow for more sustainable partnerships.
"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."
As of publishing, Marriott had yet to reach out for comment.
Zane Kerby, President and CEO of the American Society of Travel Agents (ASTA), expressed disappointment over the announcement and said the organization plans to discuss the change with Marriott.
"While we are in the process of assessing the impact of Marriott's announcement on our members' businesses, we are disappointed in the signal that a cut of this magnitude sends to the broader agency community," Kerby said in a statement Wednesday. "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. 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."
Marriott became the world's largest hotel company in September 2016 following its completed merger with Starwood Hotels & Resorts Worldwide, boasting more than two dozen brands and over 5,700 properties across the globe.
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