Marriott International is a leading global lodging company with more than 6,000 properties in 122 countries and territories. The company operates, franchises, and licenses hotels and properties under 30 brands including Marriott Hotels, The Ritz-Carlton, St. Regis, Edition, The Luxury Collection, Bvlgari, W Hotels World Wide, JW Marriott, Sheraton, Marriott Vacation Club, Delta Hotels, Le Meridien, Westin, Autograph Collection, Design Hotels, Renaissance Hotels, Tribute Portfolio, Gaylord Hotels, Courtyard, Four Points, Springhill Suites, Protea Hotels, Fairfield Inn & Suites, AC Hotels, Aloft, Moxy Hotels, Marriott Executive Apartments, Residence Inn, Towneplace Suites, and Element. Marriott reported revenues of more than $17 billion in 2016. The company is headquartered in Bethesda, Maryland (Marriott, 2017).
History
Marriott International has been in business nearly 90 years. It was officially started by J. Willard Marriott and his wife, Alice Sheets Marriott, in 1927 as an A&W root beer stand in Washington D.C. The business was expanded to three restaurants in Washington D.C., and they were called Hot Shoppes. In 1937, Marriott started in-flight airline catering flights out of Hoover Airport, south of Washington D.C. In 1957, Marriott made an historic shift into the hotel business. They opened the world’s first motor hotel in Arlington, Virginia. In 1969, Marriott opened its first international hotel in Acapulco, Mexico. In 1972, J.W. Marriott, Jr. was named CEO of the company and the company also partnered with Sun Line Cruise Ships becoming the first lodging company to enter the cruise business. In 1983, Marriott debuted lodging for business travelers with the first Courtyard hotel. With the opening of the first Fairfield Inn and Marriott Suites hotels, Marriott became the first lodging company to offer a portfolio of brands. Marriott International was officially formed in 1993 to focus on the lodging business. The company continued to grow rapidly through a series of acquisitions and the creation of new brands. In 1995, Marriott brought a historic brand into its portfolio when the company acquired a 49% interest in The Ritz-Carlton Hotel company. This acquisition instantly brought Marriott International into the luxury hospitality market. In 1997, Marriott acquired the upscale Renaissance Hotel Group and this acquisition doubled Marriott’s presence overseas. Marriott International has been growing and expanding its business through acquisitions for years. Recently, the company acquired Starwood Hotels & Resorts worldwide in 2016. By doing that, Marriott International has become the world’s largest hotel company offering more than 1.1 million rooms across 30 brands. (Marriott, 2017).
Vision
Marriott International is committed to the 100 percent satisfaction of every customer. The company’s vision is “To be the world’s favorite travel company.” To accomplish this, Marriott International focuses on taking care of guests, extensive operation knowledge, development of a highly skilled and diverse workforce, offering the best portfolio of lodging brands in the industry, cultivating a strong customer base, franchise preference, that ensures stable growth and prosperity (Gian, 2016).
Structure
Marriott International currently operates, franchises, and licenses hotels and properties in 122 countries and territories. The company is led by 13 main individuals on the executive team including CEO, CFO, Global Chief Development Officer, Global Chief Communications and Public Affairs Officer, General Counsel, Global Chief Human Resources Officer, Global Chief Commercial Officer, Group President, President and Managing Director (Asia Pacific), President and Managing Director (Europe), President and Managing (Middle East and Africa), President of the Caribbean & Latin America, and President and COO for The Ritz-Carlton, Bulgari Hotels and Resorts and St. Regis Hotels and Resorts (The Official Board, 2017). As a global company, Marriott is divided into 5 regions which are The United States & Canada, Europe, Asia-Pacific, Middle East & Africa, and the Caribbean & Latin America, and each region except the United States & Canada has its own development team (Marriott Development, n.d.). The individual properties fall under the leadership of their regional office, with 13 top executives leading the overall corporate strategy.
Marriott International uses both a vertical and horizontal structure to manage the various activities and ensure that operations are efficient. With the company’s characteristic and its large geographical reach, Marriott has adopted a hybrid organizational structure to ensure that all activities in the company are cohesive among each division and region. See Appendix A for the structure of Marriott International’s organizational chart.
Culture
The culture of Marriott International is to treat each other like their own family. Marriott believes that if the company takes care of the employees, the employees will take care of the guests, and the guests will come back again. Moreover, the company seems to focus on personality and dependability. They follow the mandate to “hire friendly, train technical” to ensure their great customer service (Gallagher, 2015).
Industry
Marriott International became the world’s largest hotel company in the industry after the acquisition of Starwood Hotel & Resorts worldwide in 2016. The company’s several competitors are Hilton Worldwide, Accor S.A., Wyndham Worldwide, InterContinental Hotels Group, and Hyatt Hotels Corp. However, Airbnb, an online hospitality service with 1.5 million listings in 190 nations is Marriott’s significant competitor that has been stealing its customers for the last five years. Travelers, especially in the United States, have demonstrated declining interest in hotels. In fact, U.S. travelers who have stayed at a location through Airbnb would be more likely to prefer using peer-to-peer lodging instead of traditional hotels (Meola, 2016).
The role of the government within the hospitality industry is crucial. There are some types of agencies that exist to regulate, provide guidelines, ensure public safety for the hospitality industry, and inform the industry on a variety of topics. For example, the Center for Disease Control (CDC) provides users with credible, reliable health information, the Food and Drug Administration (FDA) is responsible for ensuring that food is safe, wholesome and sanitary, and the Occupational Safety and Health Administration (OSHA) prevents work-related injuries, illnesses, and deaths (NYIT Library, n.d.).
Stakeholders
As a global lodging company with managed and franchised lodging operations, Marriott International has many of stakeholder groups. The major stakeholder groups are shareholders of the company, hotel owners and franchisees, and the employees of the company (Marriott, 2015).
Problems
Although, Marriott International is the world’s largest hotel company, sometimes the company confronts issues due to a turbulent external environment. Overall, Marriott has done a great job in keeping up with social trends such as environmental and green initiatives. However, there are some external issues that can impact the hotel industry and Marriott directly. Referring to the SWOT analysis in Appendix B, Marriott International’s main threats are political issues and terrorism in some countries and the impact of social issues.
The CEO of Marriott International, Arne Sorenson admitted that terrorism and domestic politics represent the biggest threat to the seven years of uninterrupted growth in the hotel industry. His biggest concerns for the future of the industry are reactions to events in the U.S. and abroad that are prompting governments to tighten borders. Specifically, recent events such as terrorist attacks in Paris, Brussels, and London have made it more difficult to grow business. About 10% of American consumers canceled their travel plans in 2015 due to terrorism, costing the industry a potential $8.2 billion in travel spending (Burke, 2016). Social issues are also a threat that can cause the company a lot of money. An example of social issues that directly impact Marriott is the North Carolina transgender bathroom law that the state of North Carolina passed the law requiring citizens to use the bathroom in public spaces that correspond to their biological gender. According to the CEO of Marriott, the event is very germane to their business in North Carolina. He estimated that there was $100 million worth of business which had not been booked into North Carolina because of the law that had been passed by that state (Ting, 2016).
Recommendations
1.) Joint ventures with other businesses
Marriott International is a famous global company that has properties in 122 countries. The company is well known and trusted for its lodging services and great customer service. While Marriott provides lodging services mainly, it would beneficial to the company to consider partnering with other businesses such as a rental car company like Hertz, the largest worldwide airport general use car rental company with more than 150 countries (Hertz, 2017). Usually, when people travel and get a rental car, most of them will get it at available airport locations. Sometimes it can be inconvenient for travelers because their flights are delayed causing them late night arrival and rental car locations are already closed. They have to wait until the morning to go back to pick it up. Partnering with a rental car company could be another way to elevate the customer’s travel experience. Instead of picking up a rental car at an airport location, hotel guests can go straight from the airport to the hotel with hotel shuttles after landing and their rental car would be waiting for them at the hotel.
2.) Consider new destinations to expand the business
Due to safety and terrorism issues in some countries these days, a lot of travelers feel uncomfortable traveling to those countries for leisure. Even so, with the rapid expansion of the Chinese economy, Chinese tourists from the burgeoning middle class are able to spend more money for traveling overseas and are doing so in record numbers. Smaller countries such as Georgia, Bosnia & Herzegovina, Iceland, Norway, Poland, and Serbia are attracting more travelers from China while major European destinations such as Spain, Italy, France, and Greece are suffering from the decline of the tourists because of refugee and terrorism issues (Arlt, 2017). In my opinion, instead of pushing business into the major markets, Marriott should consider expanding its business to some new destinations.
3.) Develop the technology that could help increase sales and revenue
Marriott provides self-service check-in and out kiosks at many Marriott properties. Also, the company now uses mobile check-in at Marriott hotels throughout North America and many additional locations worldwide (Marriott, 2017). However, these technologies are for guests who already have reservations with Marriott hotels. In fact, there are cases that people do not reserve a hotel room but for some reason they need a room to stay in, their flights get canceled or delayed or some people do not have smartphones, tablets, or computers. These people could possibly be Marriott’s walk-in guests. Therefore, Marriott should consider developing software that can be used with kiosks for walk-in guests. This technology would guide a person from checking the availability of the hotel, room rates, available room types, floors, zones, amenities, available discounts to checking the person in, copying ID or passport, and charging credit or debit cards. Basically, this person will be able to do everything by themselves at the kiosks without help from hotel’s associates. This would streamline the experience for the guest and allow the hotel’s employees to focus on issues to enhance customer service. Moreover, these kiosks can be placed in public places such as hotel’s lobbies, airports, and train stations. This technology could increase sales and save time for the hotel’s associates in high season.
Implications and Conclusion
The three recommendations suggested are feasible and could be beneficial to the company. To partner with other businesses, Marriott should consider a company that does business internationally due to its properties in 122 countries. Also, Marriott should ensure that the potential partner will provide services that meet needs and satisfaction of the company’s customers.
The second recommendation is to find new destinations to expand the business. This recommendation is related to a threat that Marriott has been confronting. Terrorism is a big issue, so before starting any business plans, research projects on travel and terrorism should be done to understand what travelers think and how they react to terrorist attacks, etc.
The last recommendation is to develop a new technology that can help increase sales and revenue. Developing any new technology is costly. Also, there is a chance that the investment may not pay off. Therefore, research about customer behavior with technology should be done and customer surveys should be conducted to see if they will be comfortable with the new technology.
Marriott International is a company that continues to improve its business by keeping up with new trends and technology. The company supports the green movement and innovations that are essential to today’s business. The company has a strong position and great vision in the market that makes Marriott the leader in the hospitality industry. Following the three recommendations, I have outlined would help maintain a positive brand image and increase revenue.
* The organizational Chart is based on information gathered from Marriott’s website and theofficialboard.com
References
Arlt, W. (2017, February 7). Chinese Tourists Look For New Destinations In 2016. Retrieved from https://www.forbes.com/sites/profdrwolfganggarlt/2017/02/07/chinese-tourists-look-for-new-destinations-in-2016past-the-mainland-in-2016/#32491b915b3a
Burke, K. (2016, May 20). Marriott CEO: Terrorism, Politics Major Threats to Travel Industry. Retrieved from http://www.marketwatch.com/story/marriott-ceo-terrorism-politics-major-threats-to-travel-industry-2016-05-20
Gallagher, L. (2015, March 5). Why Employees Love Staying at Marriott. Retrieved from http://fortune.com/2015/03/05/employees-loyalty-marriott/
Gian. (2016, March 27). Vision Mission Statement Marriott International. Retrieved from http://connaisanceforyou.blogspot.com/2016/03/vision-mission-statement-marriott.html
Hertz. (2017). Hertz International Rental Car Locations. Retrieved from https://www.hertz.com/rentacar/misc/index.jsp?targetPage=international_destinations.jsp
Marriott. (2015). Stakeholder Engagement and Policy Advocacy. Retrieved from http://www.marriott.com/Multimedia/PDF/CorporateResponsibility/2015_Reports/2015_StakeholderEngagement.pdf
Marriott. (2017). About Marriott International. Retrieved from http://www.marriott.com/marriott/aboutmarriott.mi
Marriott. (2017). Hotel Technology. Retrieved from http://www.marriott.com/meeting-event-hotels/meetings/mobility-and-tech.mi
Marriott. (2017). Our Story. Retrieved from http://www.marriott.com/about/culture-and-values/history.mi
Marriott Development. (n.d.). Regions. Retrieved from https://hotel-development.marriott.com/regions/
Matthews, S. (2016, January 14). Sizing Up Marriott International’s Competition in a Tough Industry. Retrieved from http://marketrealist.com/2016/01/sizing-marriott-internationals-competition-tough-industry/
Meola, A. (2016, March 23). Marriott and Starwood Officially Create World’s Largest Hotel Chain But Airbnb Remains a Factor. Retrieved from http://www.businessinsider.com/marriott-and-starwood-merger-complete-but-airbnb-still-competition-2016-3
NYIT Library. (n.d.). Hospitality Industry: Government. Retrieved from http://libguides.nyit.edu/c.php?g=61862&p=398523
The Official Board. (2017). Marriott International. Retrieved from https://www.theofficialboard.com/org-chart/marriott-international
Ting, D. (2016, January 7). Marriott CEO Interview: Speaking Up on Social Issues and Building a Hugh Brand. Retrieved from https://skift.com/2016/06/07/marriott-ceo-interview-speaking-up-on-social-issues-and-building-a-huge-brand/
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