Properties are free to sell rooms out of Marriott’s sales channels. If they do so, they do it on their own negotiating leverage and they’’re obliged to abide by Marriott’s BRG policy. However, an increasingly large number of properties relies solely on Marriott’s centralised distribution. Most hotels only keep in-house sales departments to negotiate events and very specific and local corporate rates. As a rule of thumb, locally negotiated rates are not eligible for the Bonvoy program, because Marriott isn’t getting any commissions out of those.
Essentially Marriott has 3 major distribution channels:
- GDS on Amadeus and other platforms: rooms are sold on BAR or close to it and Marriott gets a booking fee from the property and out of that fee Marriott pays a commission to the OTA (because of its immense leverage, Marriott pays commissions in the very low 10s %)
- wholeselale rates for tour operators: these are sold significantly discounted and TA’s are contractually required not to resell them unless bundled with other tour offers (i.e. plane+hotel, etc.) The discount amount is set by the property itself (under Marriott’s guidelines) and varies significantly with the number of orders TAs place. Frequently in order to access this wholesale rates TAs have to commit to a minimum number of room-nights per year; failure to meet that threshold results in fines.
- corporate rates, which are negotiated almost in the same way as wholesale rates.
From the property standpoint it’s pretty much irrelevant whether a guest is booking from an OTA, a brick-and-mortar TA or from the Bonvoy program: because in each case the reservation is coming from Marriott’s centralized channels the property has to pay a commission to Marriott (it may vary depending on the original booking channel, but not significantly). In fact, an argument could be made (I’ve heard it before, not sure if it’s true) that Bonvoy guests end up costing the property more than other guests, because on top of the reservation commission, Marriott also charges a program administration fee on those rates and, of course, there are the perks.
All these fees are, of course, irrespective of management and/or franchise fees Marriott charges on an indivdually-negotiated base that takes into account each properties gross and net revenues.
However draconian these arrangements might seem, properties don’t appear to be complaining. From my own individual experience (which of course is not statiscally reliable) in most, if not all, markets that I follow on OTAs Marriott properties seem to command a hefty premium in relation to other, equivalent properties in the same market, due to the company’s excellent ability to manage rate leakage, and this does not appear to translate into lower occupancies.
Last edited by MePlatPremier; Apr 3, 2021 at 12:18 pm