by Donald Wood
Last updated: 5:05 PM ET, Wed April 4, 2018
Marriott International's chief executive officer announced Thursday the company plans to lower the commissions it pays to online travel agencies.
According to Reuters.com, Marriott CEO Arne Sorenson said during a press conference in India the lowered commissions will begin with Expedia Group as the hotel company renegotiates its contract with the OTA later this year.
For the first time since Marriott merged with Starwood Hotels in 2016, the company will be renegotiating contracts with major online travel agencies, including Booking Holdings in 2019.
Marriott is just the latest to entice customers to book directly through its web and mobile platforms by offering incentives like free Wi-Fi and discounts. While the decision to cut commissions would help the company's bottom line, it could hurt travel agents.
Currently, Marriott pays a commission of around 10 percent to online travel agencies, which accounts for an estimated 12 percent of the company's overall bookings. The majority of bookings come from Marriott's direct channels.
Sorenson was in Bengaluru to open the company's 100th hotel in India, the Sheraton Grand Bengaluru Whitefield.
In January, Marriott International announced it would slash commissions paid to group and meetings intermediaries from 10 percent to seven percent. Hilton followed suit in March with identical commission rate cuts.
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