Marriott Hotels: future proofing hospitality

Is Marriott worried about the cost-of-living crisis impacting potential tourist's ability to travel? Our second quarter results were outstanding and driven by strong demand for our portfolio of 30 brands around the world. Clearly, we are watching the macro-economic climate very carefully, and planning for a range of different scenarios, but we are yet to see signs of a slowdown in global lodging demand. The pent-up demand for all types of travel, as well as the shift towards spending on experiences versus goods, sustained high levels of employment, and the lifting of travel restrictions are fuelling travel and we remain optimistic about the resilience of the sector. How is Marriott marketing its hotels to a more cash-strapped public? Is there a change in branding and marketing strategy? We’ll continue to use the power of Marriott Bonvoy to deepen engagement with our 169 million members worldwide. When our members book directly, they receive our lowest member rates and can earn and redeem points seamlessly across 30 participating hotel brands, which include over 8,100 hotels in 139 countries and territories, as well as our premium home rental offering homes and villas by Marriott International. Marriott Bonvoy members stay more, spend more and cost less to acquire. And Marriott Bonvoy is our competitive advantage. It underpins everything we do, and we use the travel platform to connect with and inspire affluent travellers across the globe. Furthermore, with a portfolio as varied as ours, we have something for every type of trip and budget. Customers may choose to stay at a mid-market Moxy when travelling with friends, and then select a St. Regis or Ritz-Carlton for special stays with loved ones. Our Marriott Bonvoy members move through our portfolio of brands depending on their trip persona. Marriott said it has seen 'no slow down in sales' - how has it thus far kept sales steady? While we knew there would be significant pent-up demand for travel post the pandemic, it has been encouraging to see how quickly travellers have returned to our hotels. By June, RevPAR in all regions outside of Asia Pacific had more than fully recovered to pre‐pandemic levels, leading to June global RevPAR 1% above 2019 levels. Worldwide occupancy for the month rose to 71%, just 5% points below pre‐pandemic levels, with global ADR an impressive 8% over the same month in 2019. Europe experienced the fastest RevPAR recovery of all our regions this year, due to a strong return of international travel. With borders open across Europe, the room nights from international guests more than doubled in the region from Q1 to Q2. While leisure travel has without doubt driven the recovery so far, we are also seeing group and business transient demand return, though at a more moderate pace. Post pandemic, what has shifted in customer preferences? Has any new trend become apparent? The global pandemic not only shifted travellers’ expectations, but it fundamentally changed human attitudes and behaviours at a speed we’ve never seen before. Today’s traveller wants a holistic, tech-enabled, personalised experience, so this is something we’ve focussed on developing. We have been reimagining all aspects of the customer journey, from the Marriott Bonvoy Mobile App, which offers mobile check-in and checkout, Mobile Requests and, wherever available, Mobile Key to our online booking process. We’ve recently launched 12 new language sites, including Turkish, Polish and Hebrew. We’ve also seen a shift from a desire to be ‘well-travelled’ to ‘travelling well’ with consumers taking a more considered, intentional approach to trips. They want to foster a deeper connection to the places they visit, getting to know people, history, food, and the culture of a place. That’s why we’re focusing on providing authentic experiences to our guests and maximising our positive impact on communities and destinations. Finally, we are seeing a new willingness from people to embrace the now and act on those “bucket list” trips, seeking out unique, remote, and off-the-beaten-path destinations. A pent-up desire to travel, combined with a new-found flexibility when it comes to remote work or learning, has resulted in travellers staying longer and mixing business trips with a leisure stay added on. What was Marriott's strategy for a post-pandemic industry? Has it gone as planned? Keeping our loyalty members engaged throughout the pandemic was one of our major areas of focus, however it wasn’t always easy. During the height of the pandemic in April 2020, we had over 70% of our hotels closed so we had to think creatively to find new ways to enable members to engage with our brands and earn loyalty points, even during lockdowns. Ultimately, we wanted to continue to inspire our members to plan travel, even when the ability to move across borders was limited. Our Marriott Bonvoy credit cards were essential to helping members in the UK and UAE continue to earn points during this time. We worked in partnership with our credit card partners, AMEX and Emirates NBD Bank, to offer valuable offers to our customers such as cash-back promotions and bonus points. Even now as international travel has returned, we still see great demand for our Marriott Bonvoy credit cards as they allow card members the chance to earn Marriott Bonvoy points on daily spend while also giving them access to exclusive benefits, offers and experiences across our portfolio. Our co-brand credit cards continue to drive significant revenue, with data showing that cardholders who are members book direct more, spend more and stay more. Now customers are back in our hotels, we continue to offer rich promotions and experience driven campaigns to our members such as the annual ‘Week of Wonders’ initiative, which provides members with the opportunity to access limited time deals and once-in-a-lifetime experiences in incredible destinations. Giving our loyalty members access to money-can’t-buy experiences through Marriott Bonvoy Moments is one of the most valued elements of the Marriott Bonvoy travel programme. These Moments enable our guests to make memories, forge new connections and enjoy some incredible once-in-a-lifetime experiences. Marriott Bonvoy will continue to debut one-of-a-kind Moments in new locations around the world throughout the rest of 2022. In addition to hotel events, Moments also include unique experiences through long-standing Marriott Bonvoy relationships with the NFL, Mercedes-AMG PETRONAS Formula 1 Team, Manchester United and the O2 Arena in London. This focus on loyalty has helped Marriott International come out of the pandemic stronger and more agile than ever before. How has Marriott adapted to the different crises and issues that have impacted the industry? At the height of the pandemic in April 2020, we had over 70% of our hotels closed and the financial impact to our business was more severe and sustained than 9/11 and the 2008 financial crisis, combined. From the first warning signs of this unprecedented event, we took a number of steps to adapt and strengthen the business including reducing costs significantly and improving liquidity. We were forced to make some tough decisions, but we had to protect our business for the long term. Looking back now at those early weeks of the pandemic, it’s hard to comprehend that our business was in such a different position to where we are today. One thing we always knew was that travel was the one experience you couldn’t recreate at home, therefore the desire to get away, explore breath-taking destinations, experience new cultures, or simply travelling to meet our loved ones was high. It’s been encouraging to see how quickly this pent-up desire for travel has returned to our hotels with Europe in particular experiencing the fastest RevPAR recovery of all our regions this year, due to a strong return of international travel. The last three years have been a rollercoaster for the travel and hospitality industry, but the speed of the recovery illustrates such a societal shift towards spending on experiences as opposed to goods and we remain extremely optimistic for the future of the travel and hospitality sector.

Marriott Hotels: future proofing hospitality

Hotel Owner speaks to Neal Jones, chief sales and marketing officer of Marriott International, about marketing strategies, travelling trends, and how it has kept sales strong

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