Ensemble Execs, Members Criticize Marriott Commission Cuts

Central Park Suite of The Ritz-Carlton New York, Central Park
The Ritz-Carlton New York, Central Park

Executives and member travel agents from Ensemble Travel Group have weighed in to express disappointment regarding Marriott’s decision to cut group commissions from 10 percent to 7 percent at its U.S. and Canada properties as of March 31. Marriott announced the new policy in a letter to its group members Wednesday.

“Group and meetings & incentive travel represent a strong book of business for a number of our Ensemble members, so we’re concerned about Marriott’s change in policy for its North American properties and its potential impact on their bottom line,” said Suzanne Hall, senior director, supplier partnerships – land / Ensemble Hotel & Resort Collection. “We work in a business of slim margins and to roll out a 30% 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,” Hall said. “We have asked Marriott to reconsider the group commission policy and send a strong message to the agency community that it does indeed value the travel industry channel.”

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Stephanie Turner, president at Brentwood Travel, called it “just another way for Marriott to begin to do more and more direct business.”

“We have seen this before with the airlines,” Turner said. “Though we travel professionals always seem to find a way around this, I would have to look long and hard before recommending a Marriott / Starwood property for a meeting.  All of the items that Marriott lists as doing a favor for us is really to benefit them. If it weren’t for their own benefit, they would not offer it including the centralized commissions.”

Mimi Cleary, VP of supplier relations and strategic sourcing at Atlas Travel, pointed to the timing of the decision, which comes not long after the company’s mega-merger with Starwood Hotels & Resorts Worldwide.

“It did not take Marriott long to validate the TMC and corporate fears that a merger of this magnitude would not be favorable for our clients,” Cleary said. “Our MICE team works hard to present as many options to our clients that are beneficial to both parties. This would give Marriott a disadvantage knowing that our profitability would be reduced versus other equal opportunities.”

Roxanne Boryczki, president at AZ Trails Travel, called the decision “very short-sighted.”

“When times are good they feel they don’t need agency business, but when times turn challenging they are all over the agent community to appeal to us for business,” Boryczki said. “They need to be consistent. From the beginning I was worried about what would happen with Marriott buying out Starwood and now it is becoming very obvious.”

What’s next? Many agents pointed out that it will depend on how successful the policy is for Marriott.

“It would be easy to assume if this is successful for Marriott they would continue down this path and make reductions beyond groups,” noted Cleary.

“Also if this move is successful for Marriott, other chains will follow,” added Turner. “I am beginning to see the next wave of get rid of the travel professional so we can work direct with the consumer. That only benefits Marriott (maybe) but not the consumer. Prices will rise and everything will be more time consuming and expensive.”

“I think ASTA and the agent community need to stand strong in sending a message to Marriott that this policy is just not acceptable,” said Boryczki.

Do you think Marriott’s commission cuts will hurt your bottom line? Let us know in this poll and we’ll feature the results on www.travelagentcentral.com.

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