Hotels Raise Commissions in Wake of Marriott Cut

From dishwasher to Merrill Lynch call center to Wyndham's corporate headquarters, Chip Ohlsson's journey imprinted hospitality into his DNA.
Wyndham Grand Clearwater Beach

Three hotels are raising their group commission levels, and Wyndham Hotel Group is holding them steady, following a week of controversy after Marriott International moved to cut its commission on group bookings from 10 percent to 7 percent at its properties in the United States and Canada, effective March 31.

“With the conversation circulating around commissions this week, wanted to reach out to confirm that Wyndham Hotel Group is not making any changes to our strategy,” a Wyndham spokesperson tells Travel Agent. “We value our partnership with all group intermediaries and travel agents and will continue offering 10 percent commission on room revenues with no plans to adjust in the near future.”

Wyndham Hotel Group represents more than 8,100 properties globally across 19 brands, including Wyndham Hotels and Resorts, Wyndham Grand and Tryp by Wyndham.

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Three other hotels reached out to Travel Agent saying that they would increase their group commissions from 10 percent to 12 percent in response to the “growing trend of incentive and commission cutbacks,” according to a representative for the properties. They are Eden Roc Miami Beach, Nobu Hotel Miami Beach and Nobu Hotel Los Cabos, and they are applying the increased commission offer to newly contracted groups that book a minimum of 10 rooms per night now through December 31, for travel anytime.

Marriott has said that the cuts were 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 Travel Agent. “The current business model and environment, however, present significant obstacles to making the investments needed to deliver a world-class experience for customers.”

The plan, however, has garnered strong pushback from travel industry leaders, and some agents have raised the concern that, if Marriott finds success with the new policy it could expand it, or other hotel companies could follow suit.

“It would be easy to assume if this is successful for Marriott they would continue down this path and make reductions beyond groups,” Mimi Cleary, VP of supplier relations and strategic sourcing at Atlas Travel, a member of Ensemble Travel Group, said at the time.

“Also if this move is successful for Marriott, other chains will follow,” added Stephanie Turner, president at Brentwood Travel. “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.”

Over 70 percent of travel agents in a recent poll responded that Marriott’s commission cuts would hurt their bottom line, with 50 percent saying that the cuts would hurt “a lot.” 11 percent who answered “Other” indicated that they either did not book Marriott, or would steer their group business away from the company.

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