Marriott Hotel Owners Want a Bigger Cut of Loyalty Income

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Login Dozens of Marriott's largest hotel owners are pressing the company to share more of the roughly $1 billion it forecasts it may earn this year from co-branded credit cards. A March letter to CEO Anthony Capuano and Chairman David Marriott was signed by 51 owners representing nearly 1,000 Marriott hotels, the Wall Street Journal reported on Tuesday. Why it matters: Loyalty programs have turned into some of the most profitable corners of the hotel business.

The tussle over the various streams of income pits the major hotel groups against the franchisees who provide services to the guests cashing in the points. Marriott said in February that it expects “around a 35% increase” in co-branded credit card fees this year, driven by issuers paying the company higher royalties and continued growth in cardholder sp Get unlimited access with Skift Pro. Subscribe now for complete access to Skift.

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Register Subscribe Already a subscriber? Login Key Points Marriott's largest hotel owners are pushing for a greater share of the company's growing loyalty and co-branded credit card revenue. Owners seek more transparency in the Bonvoy fund and higher reimbursement for award stays, citing squeezed profits amid rising costs.

Marriott has made some concessions, such as reducing loyalty charge-out rates and boosting reimbursements, but owners want a portion of high-margin credit card fees. Summary Dozens of Marriott's major hotel owners are pressuring the company to give them a larger share of the substantial income generated by its co-branded credit cards and loyalty program, as their own profits are being squeezed by rising operational costs. While Marriott has made some adjustments—such as cutting loyalty charge-out rates and increasing reimbursements for award stays—owners are still demanding more transparency and a share of the lucrative credit card revenue.

The situation is being closely watched by other hotel groups facing similar challenges with franchisee relations and loyalty program economics. First read is on us. Subscribe to read more essential travel industry news.

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