Travel Leaders Group – Update on Agreement Status
We are disappointed to inform you that Marriott International and Travel Leaders Group (TLG) were unable to agree upon terms for a future global agreement for Marriott-branded hotels to continue to participate in TLG’s Worldwide Hotel program and to retain preferred partner status with the Travel Leaders group of companies. TLG has exercised their right to terminate our current agreement as of March 1, 2015 (excluding the Ritz-Carlton brand).
Background:
TLG is one of North America’s largest travel companies, consisting of the following companies: Tzell Travel Group; Travel Leaders Associates; Travel Leaders Corporate; Results! Travel; Vacation.com; Nexion; Cruise Specialists; Cruise Holidays; Luxury Travel Network; and Protravel.
Marriott and TLG have had a mutually successful partnership agreement in place since 2012. However, while negotiating over the past few months, TLG insisted upon unreasonable compensation increases that would have raised costs by over 30% on TLG-supplied business we receive today, making them one of our most expensive distribution channels. TLG rejected Marriott’s reasonable counter offer that would have rewarded them for driving additional share of targeted high-end luxury and leisure business to Marriott-branded hotels.
Impact:
There will be revenue impact associated with a reduction in business from TLG. A significant portion of existing business is expected to remain in the Marriott system, as it is associated with special corporate, government, or Gold and Platinum Marriott Rewards members.
Although brands in the Marriott portfolio will no longer participate in TLG’s Worldwide Hotel program, TLG will continue to sell Marriott under our Preferred Travel Agency (PTA) program (10% commission for IATA’s with an HE! graduate and 8% for all others). Under the PTA agreement, TLG is bound to “treat Marriott at the point of sale, at least as favorably as any other hotel chain for which the agency makes reservations.” This helps ensure that TLG will not proactively off-sell hotels in the Marriott portfolio.
We have strong alliances with other important retail agency partners and continue to work to find new ways to grow our business in the leisure/luxury segment. If you have any immediate questions, please reach out to Cynthia Perry, Global Director, Travel Industry Sales, cynthia.perry@marriott.com.