www.businesstravelnews.com/procurement FEBRUARY 2018 / 5
Marriott International will reduce
the commissions it pays to group
intermediaries from 10 percent to 7
percent beginning March 31, 2018.
The policy change will be a brand
standard that will take effect at all
managed and franchised properties in
the U.S. and Canada. Marriott global
officer of digital, distribution, revenue
management and global sales Brian
King said the change is a “reset and
rethink” moment for the company as
it considers how much investment is
needed for innovation, the demand
from customers and the pace of
revenue growth alongside the pace of
commissions. “They’re just not commensurate with each other,” King said.
The policy change, while sudden, didn’t
shock too many in the meetings and
events space, as fears that commissions would change have been growing
the past three to four years, particularly
in light of industry megamergers. One
consultant speaking on background
prior to any Marriott news suggested
the company had the power to do away
with group and meetings commissions
entirely. King, however, said that was
never a consideration. While Marriott’s
commission policy takes effect March
31, it won’t apply to some large firms.
Maritz Global Events president David
Peckinpaugh said it and Maritz-owned
Experient have received a “temporary
exemption,” but declined to say when
that exemption will end. A spokes-person for Marriott said the company
could not share details of specific
contracts. Marriott will continue to
honor a 10 percent commission on any
contracts signed prior to March 31.
Travelport veteran Scott Hyden will leave the global distribution system
operator to join Carlson Wagonlit Travel’s nascent RoomIt division as
SVP of customer experience. Hyden rejoins former Travelport chief commercial officer Kurt Ekert, who became CEO of CWT in 2016. After taking the
reins at CWT, Ekert put strategic emphasis on hotel selling and established a
dedicated hotel unit. Last year, CWT put more oomph into the division with
the launch of RoomIt. RoomIt aggregates, normalizes and sells hotel content
from various sources, including GDSs, aggregators like online travel agencies and its own negotiated rates. That content can be served up to clients
through the CWT To Go mobile channel, offline agents and third-party
online booking tools. As of mid-2017, RoomIt had 150 dedicated employees
and was working on expansion.
Two of the world’s largest travel management companies are set to
merge after American Express Global Business Travel offered up to 410
million British pounds to buy Hogg Robinson Group. Amex GBT will combine with Hogg Robinson’s TMC business HRG. Hogg Robinson also confirmed
a separate agreement to sell its other division, the payments and expense
management software-as-a-service business Fraedom, to Visa for 141.8 million
British pounds. Hogg Robinson said the bid from Amex GBT was unsolicited
and came when it was already in early discussions to sell Fraedom to Visa.
Hogg Robinson’s directors have recommended Amex GBT’s offer, which is
scheduled to close in March and take effect in the second quarter of this year.
The offer needs to be accepted by 75 percent of shareholders to be completed.
Regulatory approval will also be needed in various jurisdictions, including the
European Union and the U.S. According to the offer document, there will be an
expected job reduction of 6 to 8 percent of the total combined group full-time
equivalent workforce. Around 12,000 people work for HRG, of which 5,000 are
employed directly in 25 countries and another 7,000 work for partners in a
further 100 countries. Amex GBT employs 12,000 people in nearly 140 countries.
The offer document said the “significant opportunity to remove costs” was a
key reason for Amex GBT wanting to buy Hogg Robinson and that “certain
support functions ... do not need to scale in order to achieve incremental volumes. Such functions include global client solutions, learning and development,
quality, service transformation, implementation and workforce management.”
The offer also stated that the “value of the acquisition is principally in GBT’s
ability to achieve a greater global presence and better serve customers’ needs.”
It claimed that the two companies offer “a complementary product range,
distribution channels and geographical exposure.” Amex GBT also hinted that
another reason for its interest is HRG’s independent technology. “The combined group will capitalize on Hogg Robinson’s long history of leveraging technology to attract and retain customers, evidenced by Hogg Robinson’s iSuite,
online and mobile apps,” the offer said.
Marquis Ballroom, Anaheim Marriott