Marriott International will slash the industry-standard 10 percent commission paid to group intermediaries, the hotel giant advised today in a letter sent to third-party planners. Beginning March 31, the rate will be reduced to 7 percent for hotels sourced in the U.S. and Canada. The rate will remain at 10 percent for properties in other countries.
"Many corporations and organizations rely on group intermediaries for sourcing, contracting, and planning meetings and events," reads the letter, which was signed by Steve Heitzner, Marriott International's chief sales and marketing officer for the Americas, above. "We understand the value these third parties bring, and they are also important business partners to Marriott.
"At the same time," Heitzner continues, "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. Changing economics in this segment, plus these growing costs, required us to reevaluate our intermediary compensation model. We are introducing a new strategy that will result in a more sustainable way of partnering with intermediaries."
Marriott will pay the 10 percent commission rate for any contracts signed prior to March 31, 2018.
"We remain committed to working together in support of each party's best interests," the letter reads. "We share the same goal - to provide you with the best hotel solution and value for your meetings and events."