With Marriott International announcing its commission rate
cuts for group bookings in late January, ASTA CEO Zane Kerby has been busy,
talking with hotel companies and travel agents about the
policy's potential ramifications. Kerby joined ASTA in 2013 after serving as a
senior vice president with the Global Business Travel Association. He spoke
with hotels editor Danny King.
Q: Were you surprised by Marriott's decision?
Zane Kerby
A: Yes, but whenever you blend any two hotel brands
[Marriott acquired Starwood Hotels & Resorts in 2016], you wonder which
culture will prevail. It appears that the less-friendly stance toward agents
has prevailed.
And I would take exception to agents being called
intermediaries. I'm pretty sure Marriott wouldn't want to be referred to as a
temporary-housing vendor or a box and a bed. 'Intermediary' doesn't describe
today's travel agents. They provide a tremendous amount of value for both the
customer and supplier, so to be referred to as an intermediary has a
dehumanizing effect.
Q: Have you spoken with Marriott?
A: We've spoken several times to get clarification on the
policy. There are slightly encouraging messages -- we thought it would apply to
every group booking, but they said family group bookings through the GDSs didn't
apply. They also said they'd put some modified language on the policy to make
it more clear, but they haven't given us further details. This was done kind of
in the dead of night.
Q: What's your response to Marriott saying it needs to cut
commission rates to address rising costs?
A: I would take them at their word, but financially, the
company is doing tremendous, and the Starwood acquisition is a part of that.
And they just got an enormous lift from Uncle Sam in the form of the corporate
tax-rate reduction. This is not a company that's fallen on hard times.
Q: Are you getting signals that any other major hotel
companies will also reduce group commission rates?
A: We've had several conversations this week with several
hotel companies and were encouraged by their responses. All signs point to no
major hotelier following this move.
Q: Might this move portend something similar to the airlines'
commission reductions of the 1990s?
A: I don't see that at all. The management and cost
structure of the airlines is much different. Marriott owns very few of its
hotels. The franchise owners have the boots on the ground, so it'll be
interesting to see if franchisees in large markets with serious competition
will put themselves at a cost disadvantage by adhering to this policy.
Q: Does the travel agent community have enough power to
potentially alter this policy?
A: Agents book about 25% of all rooms in the U.S., worth
about $33 billion in annual revenue, so I think agents can affect change. Group
business is fantastic for hotel owners and brands. They often have food and
beverage and daily rate minimums. My sense is that they'd rather have a group occupying
50% of the hotel than transient at 80% occupancy because of all of the
follow-up revenue from the groups.
Q: If Marriott sticks with the rate cut, is there any
concern that travel agents might lose confidence in ASTA's ability to protect
the sector's interests?
A: Everyone makes their own determination. We're trying to
persuade Marriott that this is a move that's not in their long-term interests.
We're obviously the tip of the spear on this issue, but ASTA's value is much
greater than dealing with Marriott. We're engaged on all levels, from education
on government regulations to compliance to negotiation skills. But we have a
very clear position: that our agents are worth everything they're paid and
more; and we've let Marriott know that in no uncertain terms.