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January 29, 2018

Some Companies Could Avoid Marriott Commission Cuts

Certain third-party businesses could maintain their 10 percent commission level on group bookings with Marriott International, even after the cut to commission levels on March 31, according to a tip from one of our readers. A Marriott spokesperson tells International Meetings Review that the company is honoring existing contracts.

Last week in a letter to its group partners Marriott reported that, effective March 31, it would reduce the commissions paid to group intermediaries from 10 percent to 7 percent for all of its properties in the U.S. and Canada. Shortly after the news broke, a reader reached out to International Meetings Review with a tip that certain third-party companies would still be able to get the 10 percent commission after March 31.

“We can’t discuss details of specific contracts, but we are honoring existing contracts,” a Marriott spokesperson told International Meetings Review when asked about the issue.

If the existing contracts specify a 10 percent commission level, and Marriott honors that contract, that level would persist as long as the contract does. Since Marriott cannot discuss contract details, it is unclear whether these companies will be able to maintain the 10 percent commission level after their currently existing contracts expire.

Marriott claims that the policy was necessary because costs for the company’s North American hotels and owners are growing faster than group revenue, impacting hotel profitability.

“At Marriott International, meetings and events represent a critical part of our business as well as an opportunity to drive innovation and win with customers,” the company said in a statement provided to International Meetings Review. “The current business model and environment, however, present significant obstacles to making the investments needed to deliver a world-class experience for customers.”

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