Phase 1: Team Marriott

Cole Woodward, Kristin Chandler, Niema Beglari, Savannah Sherard, Trevor Chasse, Tyler

Valen

Professor Piscitello

MKTG 361

September 18, 2017

University of Arizona
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Overview

Marriott International is a global company in the hospitality industry. The Marriott franchises,

licenses, and operates hotels as well as timeshare properties. The Marriott offers multiple brand

names that fit each customer due to different price ranges and service points (About Marriott

Hotels, n.d.). Competing in the hotel and motel industry in the U.S., operators in the industry

have experienced booming growth in the past five years. Due to increases in corporate profit and

consumer spending, industry revenue has grown rapidly as the economy improved and travel

rates increased. The industry is expected to continue expanding over the next few years as a

result of a steady global economy and increased consumer confidence (Alvarez, 2017).

Challenges

A major challenge to Marriott and the travel industry is home sharing business Airbnb.

Customers find that Airbnb provides an unreliable experience that varies host to host, as well as

the inconsistent amenities that are unmatched by Marriotts services. Another challenge the hotel

industry faces is staying relevant to consumers through their online reputation. The industry also

faces a marketing challenge with optimizing direct bookings. Many other websites like Expedia

or Trivago are known for being among the best hotel booking sites because they allow customers

to see a comparison of prices across multiple hotels. In order to maximize direct booking profits,

hotel companies need to know how to manage their channels better (The new challenges of

hotel marketing, 2015).

SWOTT Analysis

Marriotts major strengths are its diversified portfolio of hotel brands that reach distinct customer

segments for each target market. As seen in Figure 1, the acquisition of Starwood Hotels &

Resorts bolstered Marriotts portfolio to 30 brands and combine the two companies rewards
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programs, which creates a massive network of Marriott hotels for reward members (MarketLine,

2016). A major weakness of Marriott is the companys business model which focuses on

franchises and management contracts. Figure 1, 40% of its hotel rooms under management, 57%

in franchise agreements, 2% under unconsolidated joint ventures, and only a mere 1% of

properties are owned by the company (MarketLine, 2016). This model does provide stable

revenues depending on economic conditions, however, doesnt provide room for revenue growth.

Competition

Marriott owns the largest market share in the Hotel and Motel industry in the United States at

19.7% (Alvarez, 2017). Marriotts primary competition is Hilton Worldwide Holdings Inc. and

InterContinental Hotels Group PLC who make up 13.5% and 6.9% of the market respectively.

Hilton owns 13 brands that vary from luxury to budget chains. On the other hand

InterContinental Hotels Group PLC owns 12 different brands developed in response to customers

needs (Alvarez, 2017).

Unique Selling Proposition (USP)

Marriotts loyalty rewards program gives its consumers access to their diverse brand portfolio.

With the recent acquisition of Starwood Hotels & Resorts Worldwide the reward program has

expanded immensely as customers are able to connect their SPG Rewards with their Marriott

account. The rewards program yields repeat customers for the Marriott giving them access to all

of its brands and serves as their unique selling proposition.

Target Markets

Families are a primary market for the hospitality industry. Hotels like the Courtyard Inn make up

more than 20% of Marriotts company profile, these hotels are specifically made to cater to

families on vacation (Alvarez, 2017). By targeting families of four to five, with a middle class
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income, they are able to succeed within the family market. Marriott is currently trying to expand

into the Chinese market place and are aiming to attract wealthy, Chinese customers who are 50

years old or older (King, 2017). Marriott is anticipating 700 million outbound trips during the

next five years to come from China and if they can grasp part of this market, it would result in a

large profit (King, 2017). Their tertiary market is Generation X or more specifically, employed,

traveling business people between the ages of 26-40, people who often extend business into

leisure vacations (Marriott, 2005).

Summary

Marriott International is an operator of hotels and timeshares worldwide. Within the Marriotts

three services offered, the Marriott places a huge importance on providing great customer

service. The Marriott is continuing to grow within the hotel and motel industry and owns the

largest market share within the industry. Throughout the Marriotts global expansion, three main

challenges arise including: Airbnb, e-reputation and direct bookings. All of these challenges are

affecting the Marriotts marketing strategies; therefore, the Marriott will continue to grow in order

to keep up with consumer needs. The Marriott focuses on three main target markets including

generation x, families, and international customers. Although all target markets differ, the

Marriott will continue to succeed in these markets due to their core values and attention to

customer service. Overall the Marriott serves globally as a hotel and travel service and will

continue to grow and expand in the upcoming years.

Attachments

Figure 1: SWOTT Analysis

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Strengths
Marriott owns the strongest portfolio of diverse hotel brands
of over 6,000 properties in over 120 countries. Marriotts
portfolio includes well-known hotel brands that are divided
into various segments for its different consumer
demographics. This diversified brand portfolio and awareness
of differing clientele give Marriott the edge over its
competitors.
The acquisition of Starwood Hotels Worldwide expanded its
brand portfolio to 30 hotel brands. This combination of two
industry leaders provides an enhanced travel experience for
the consumer with a range of accommodations that fit every
target market group.
The elite Marriott Rewards program allows members to earn
points based on money spent at its properties. These points
can be redeemed for additional stays at Marriott brands,
airline tickets, rental cars, and other services. With more than
54 million members, the rewards program has become even
stronger with the Starwood acquisition as customers can
combine their SPG rewards account with Marriott rewards.
Marriotts global presence is second to none. The company
operates properties in the Americas, Europe, Africa, Asia
Pacific, and Middle East.
Weaknesses
Marriotts business model places emphasis on franchising
and managing its hotel brands. As of December 2015,
Marriotts portfolio includes 40% of its hotel rooms under
management, 57% in franchise agreements, 2% under
unconsolidated joint ventures, and only a mere 1% of
properties are owned by the company. The emphasis on
franchising and management contracts provide stable
earnings, however, do not provide for much room for
revenue growth. Furthermore, franchise and management
agreements can lead to a separation of brand association with
Marriott and the companys core values. If these properties
do not deliver Marriott quality service, then it is Marriotts
image that is negatively affected.

Opportunities
Initiatives by the US government have been focused on
tourism promotion. The national travel and tourism strategys
goal is to increase the number of international visitors to the
US by 50% to 100 million by 2021. This increase would
generate an additional $250 billion in annual spends.
The US hotel and motel industry is steadily growing.
According to Business Source Complete, the market had
revenues of $189.6 billion in 2015, a 7.8% increase over the
previous year. Also, the market is expected to reach a
valuation of $246.3 billion by 2020 a 30% increase since
2015. Marriott also has significant potential to position
themselves in foreign markets such as China, India, Europe,
and more. Most recently, the joint venture with Alibaba
group represents a major opportunity to capture the chinese
market. Alibabas gateway will allow Marriott to reach over
500 million chinese consumers.
Threats
Working in the hospitality industry, Marriott is in a
competitive environment. Established companies such as
Hilton Worldwide Holdings and InterContinental Hotels
Group provide intense competition. This competition creates
a high demand for property space.
Terror attacks have continued to affect the hospitality
industry and Marriott specifically. Marriott an american
company has been a target of many terror attacks throughout
the world. These attacks result in lower consumer confidence
regarding the security and safety of the properties.
Operating properties globally subjects Marriott to a wide
variety of differing laws, regulations, and policies. Changes
to these laws, regulations, and policies only creates more
work for the company. For example, if governments revise
tax laws it can have a significant effect on the economy as
well as reducing company profits.

Trends
Vacationers are planning longer holiday trips at Marriott hotels. The company noticed their five day bookings soared 67%
over the 2016 holiday. More than a third of customers are booking stays around 3 to 5 days according to Marriott's data. This
represents an approximate 70% increase in longer stays compared to non-holiday summer weekends.
Marriott is finding that demands for packages is increasing. Marriotts Summer Travel Trend reports show that consumers
booked packages 7% more often for their holiday weekend vacations.

References

About Marriott Hotels | Marriott Corporate Business Information. (n.d.). Retrieved

September 16, 2017, from http://www.marriott.com/marriott/aboutmarriott.mi

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Alvarez, A. (2017). IBISWorld Industry Report 72111. Hotels & Motels in the U.S. Retrieved

September 14, 2017 from IBISWorld database.

MarketLine (2016). Marriott International, Inc. SWOT Analysis, 1-8. Retrieved from

EBSCOhost.

Marriott International SWOT Analysis | USP & Competitors | BrandGuide. (n.d.). Retrieved

September 14, 2017, from

http://www.mbaskool.com/brandguide/tourism-and-hospitality/2370-marriott-

international.html

Marriott Makeover Aimed At Youth Market. (2005). Meeting News, 29(6), 9.

King, D. (2017). With Alibaba deal, Marriott sets sights on Chinese travelers. Travel

Weekly, 76(33), 8.

THE NEW CHALLENGES OF HOTEL MARKETING. (2015). Retrieved September 14, 2017,

from https://www.buzzandgo.com/the-new-challenges-of-hotel-marketing/

Beyond the Beach: Marriott International Reveals Top Trends in Inaugural Summer Travel

Trend Report 2017. (2017). Retrieved September 17, 2017, from

http://news.marriott.com/2017/05/beyond-beach-marriott-international-reveals-top-

trends-inaugural-summer-travel-trend-report-2017/