Travel Industry Leaders Speak Out Against Marriott’s New Group Commission Policy

The decision by Marriott International to lower travel agent commissions for group bookings at hotels in the U.S. and Canada this week, has caused outrage across the travel trade industry. 

Consortia heads and the American Society of Travel Agents (ASTA) shared similar sentiments regarding Marriott International’s announcement that it was reducing agent commissions on group bookings, and it was disappointment.

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“A 30 percent cut in intermediary compensation diminishes the value of the role agents’ play” ASTA President and CEO Zane Kerby said in a statement. “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.”

“We are disappointed in the signal that a cut of this magnitude sends to the broader agency community,” said Kerby.

Marriott announced the news Wednesday, citing growing distribution costs that are “limiting our ability to invest in meeting products, experiences, and innovations” as the reason behind the decision.

“While group intermediaries play an important role in the marketplace, costs for our North American hotels and owners are growing at a faster pace than group revenue, which impacts hotel profitability. To strike a balance and ensure the long-term health of our business, we will reduce commissions,” a Marriott spokesperson told TMR on Wednesday.

Consortia leaders united in reaction
Matthew D. Upchurch, Chairman and CEO of Virtuoso, said Virtuoso shares ASTA’s concerns over “the perceived diminishment of the travel advisor’s value that it signifies. It’s our position that the conventional understanding of an intermediary needs to be redefined for today’s travel landscape.”

Signature will work “in concert with ASTA,” Hotel and Resort Program Senior Vice President Richard Lebowitz said, as they assess the impact of a 30 percent cut in group commissions on members’ businesses, adding that “group intermediaries serve an important role in delivering value and customer satisfaction.

Nicole Mazza, chief marketing officer for TRAVELSAVERS, NEST, and the Affluent Traveler Collection, told TMR that “that agency community offers a tremendous value in selling and promoting group sales for hotel partners. It is disappointing to learn that Marriott has taken this position when the travel agency community has supported Marriott for many years, especially through its recent acquisition.”

Travel Leaders Group “strongly disagrees” with Marriott’s decision. “It is unfortunate that Marriott has failed to recognize the tremendous value travel agents bring to group bookings and has instead chosen to view their agent partners as just another expense item,” Michael Heflin, senior vice president of hotels, lamented.

“Our agents should be fairly compensated for their investment of time, energy, resources, and the valuable guidance they provide their clients, and we will continue to firmly advocate for appropriate group commissions within the industry,” he added.

Travel Leaders will continue to make its 4,700 agents aware of the hotel partners, at both the brand and property level, “who actively support our travel agents and fairly compensate them for the group bookings that they deliver,” Heflin said.

In a statement to TMR, Ensemble Travel Group’s Suzanne Hall, senior director of supplier partnerships-land, said that the 30 percent cut “seems severe especially at a time when the economy is rebounding and meetings and events are back on the table for many corporations.”

“It’s interesting that consumers are (finally!) understanding the difference that travel agents make, while Marriott continues to erode the value of the travel agent in bringing business to Marriott properties,” she added.

Like others, Hall said that Ensemble has already asked Marriott to reconsider the policy and “send a strong message to the agency community.”

One of Ensemble’s members, Stephanie Turner, the president of Brentwood Travel in Creve Coeur, Missouri, said she would “would have to look long and hard before recommending a Marriott/Starwood property for a meeting.”