Luxury Group Planners Take a Hit With Marriott Move

Ritz-Carlton Chicago
The Ritz-Carlton Chicago, a Marriott International hotel in the U.S.

Those selling luxury groups, and otherwise, are about to see their sales commissions go down, thanks to a major move by Marriott International.

The company, which owns the Ritz-Carlton, Bulgari and St. Regis brands (as well as 27 others) has reported that starting March 31, 2018, Marriott International will reduce commissions paid to group intermediaries from 10 percent to 7 percent for all properties in the U.S. and Canada.

Marriott’s senior vice president of global sales, Tammy Routh, broke the news to the company’s “group partners” in a letter distributed electronically today.

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The news hits hard if only because of the sheer size of Marriott; following its merger with Starwood Hotels & Resorts in September 2016, the company now comprises 30 brands and more than 5,700 properties globally.

Why cut group commissions? Routh’s letter said that “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.”

Those contracts signed prior to the March 31st effective date will be eligible for 10 percent commission,” the letter continued. “This policy applies to group intermediaries globally when they are sourcing business to hotels in the U.S. and Canada. Commissions for our hotels outside the U.S. and Canada remain at 10 percent,” Routh said in the letter.

Marriott’s meetings offerings include a number of programs aimed at making group bookings with the company easier, the letter noted, including access to “a collection of 100-plus of the largest convention and resort hotels across The Americas” and “Meetings Excellence!,” an online training program whose graduates receive discounted rates at certain Marriott properties.

Marriott also has a program for centralized group intermediary commission payments which aims to pay out commissions 45 days after an event ends. Marriott also has a group intermediary website and a centralized group support desk.

“We are committed to working together in support of the best interests of our mutual customers. We share the same goal – to provide customers with the best hotel solution and value for their meetings. We value your business and continued partnership,” Routh’s letter concluded.

Marriott International’s 30 brands include: Bulgari Hotels and Resorts, The Ritz-Carlton and The Ritz-Carlton Reserve, St. Regis, W, EDITION, JW Marriott, The Luxury Collection, Marriott Hotels, Westin, Le Méridien, Renaissance Hotels, Sheraton, Delta Hotels by Marriott, Marriott Executive Apartments, Marriott Vacation Club, Autograph Collection Hotels, Tribute Portfolio, Design Hotels, Gaylord Hotels, Courtyard, Four Points by Sheraton, SpringHill Suites, Fairfield Inn & Suites, Residence Inn, TownePlace Suites, AC Hotels by Marriott, Aloft, Element, Moxy Hotels, and Protea Hotels by Marriott. The company also operates loyalty programs: Marriott Rewards, which includes The Ritz-Carlton Rewards, and Starwood Preferred Guest.

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