AccorHotels Says It Has No Plans to Follow Marriott's Commission Cut


At AccorHotels' recent 2018 Global Meetings Exchange held at the Fairmont the Queen Elizabeth in Montreal, Chris Cahill, CEO of AccorHotels luxury brands, told a packed audience of clients and members of the sales team that the company had no immediate plans to follow Marriott International's move to cut commissions from 10 percent to 7 percent as paid to third parties booking group business at its North American properties.
At a separate media-only roundtable, attended by Cahill and several senior AccorHotels executives, Jeff Doane, vice president, sales and marketing for North and Central America, had more to say on the topic. He noted that the entire hotel industry has seen significant growth in third-party bookings, both in North America and globally, at higher percentages each year, but said Paris-based Accor's culture in relation to third-party business helped distinguish it from Marriott.
"I think if you look at Marriott as a company vs. Accor, you will see a different business dynamic," said Doane. "Their's is a Starbuck's strategy of, if we put one on every corner, everyone and everybody will buy from us. We lean more to traditional relationships. We demand more effort on our sales side."
Compared with Marriott International, AccorHotels is not a major player in the North American market, but its July 2016 acquisition of Fairmont Raffles Hotels International for $2.7 billion gave it bump in luxury product, particularly with a Fairmont portfolio that has grown to 39 properties in North America, including the 1,048-room Fairmont Austin, which opened this week. The 394-room Fairmont Century Plaza, Los Angeles, a renovation of the former Century Plaza Hotel, is scheduled to debut later this year.
"When people in the industry ask me, 'What are you, Accor, going to do," I say, 'What are you going to do?'" said Doane. "At Accor, we ask what value does the third party bring to us, not how many events they book. If there is value in what they are bringing, then you pay for it." 

Still, said Doane, Accor like other hotel companies are watching and waiting to see how the industry reacts to Marriott's new position. "I believe that if Hilton and Hyatt follow Marriott's strategy, it will become an industry standard," said Doane. "But if enough customers push back, and we have heard them talk of moving business, then we will have a very different game."

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