Veeren GowreaSWOT analysis of Marriott International
This is a detailed SWOT analysis of Marriott International. It aims to provide the readers with insights into the strengths and the weaknesses of Marriott International. It also touches on the potential opportunities and the threats facing the hotel. Marriott International was founded in the U.S in 1927. It is the largest hotel company in the world since its acquisition of Starwood in 2016.
Strengths of Marriott International
Global presence
After acquiring Starwood Hotels and Resorts Worldwide in 2016, Marriott became the world’s largest hotel company with nearly 1.27 million rooms. It has over 7000 plus properties across 131 countries. Likewise, it owns a number of big brands, some of which many customers do not know who they belong to. For example, Bulgari Hotel in Milan, Bali, and London; Gaylord hotels in the USA; and a multitude of budget brands Marriott have bought over the years (Marriott International, 2021). It operates 30 brands in hotel sector under the Marriott umbrella. Most of the brands have been purchased over the years to build up the hotel’s impressive portfolio.
Growth through innovation
Ritz-Carlton Yacht Collection will offer bespoke voyages and accommodate around 300 passengers/Guests from 2021 with each guest paying $5,600 per person. Partnership with Alibaba to book hotel reservations without a deposit, and enjoy a wallet-free experience is also impressive. The Alibaba membership includes 500 million members potentially. Using Airbnb concept, the London-based Tribute Portfolio Homes consists of 200 apartments charge customers from $200 to $1,000 per night.
Loyal customers
Marriott International has the strongest loyalty programs in the hospitality sector worldwide with 110 million members. Lock (2021) reports that customers are very satisfied with the hotel as evidenced from the hotel’s score of 80 in the American Customer Satisfaction Index, four points higher than the overall average of 76 out of 100.
Weaknesses of Marriott International
Bad publicity
After hurricane Irma had struck the Caribbean island of St. Thomas, Marriott sent its cruise ship/yacht to rescue people, but rescued only its own hotel guests leaving others behind, although they had loads of space.
Dissatisfied employees
The hotel still needs to do more to improve the employee satisfaction. It is worth mentioning that its workers went on strike over pay and other issues in the past that affected brands such as Marriott, Sheraton, Aloft, Element, Ritz-Carlton, W, Palace, Courtyard, St. Regis, Westin and Royal Hawaiian.
Opportunities for Marriott International
New geographical markets
Global hospitality sector is growing rapidly, though there was a halt in 2020. While Marriott has a very good presence, further growth is possible in a number of countries in the world. Exploring new geographical markets is also worth the effort.
Increase in global travel
The number of people travelling for both work and pleasure should go up soon once the global economies open. Even in difficult time such as in 2021, the demand for hotel rooms varied around the world. In fact, China showed strong resilience (Sebastian, 2021). Marriott can avail of this opportunity by using its existing properties and building strategic alliances with other hotel chains and airlines.
Threats to Marriott International
Family feud
The biggest threat at the moment is the on-going family feud involving John Marriott III who claims that his father Bill Marriott and his uncle Richard Marriott have unlawfully cut him out of the family’s $3 billion trust.
Global crisis
Global lockdowns affected Marriott badly in 2020. It reported a loss of $267 million for the year (Sebastian, 2021). Demand is not rising yet, and therefore, it is a big concern for the hotel.
Legal threats
There are tensions and legal issues with China as Marriott went head-to-head in competition with a Chinese firm for the acquisition of Starwood. The Chinese wanted it as well and lost, delaying the merger acceptance afterwards (Connor, 2018). Marriott was ordered to pay a civil penalty after a lawsuit in which the hotel blocked the personal Wi-Fi of guests at one of their conference centres and agreed to pay a $600,000 civil penalty.
Concluding statement
From the research done for the purpose of this SWOT analysis of Marriott International, it can be asserted that Marriott has become the biggest hotel chain in the world and is not giving up this position so easily. Marriott’s performance is better than its rivals in terms of profitability and net profit margins.
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Last update: 27 March 2021
References
Connor, N (2018) “China shuts down Marriott website for a week after hotel chain listed Tibet and Hong Kong as countries” https://www.telegraph.co.uk/news/2018/01/12/china-shuts-marriott-website-week-hotel-chain-listed-tibet-hong/ (accessed 25 March 2021)
Lock, S. (2021) American customer satisfaction index for Marriott hotels in the U.S. 2008-2020, available at: https://www.statista.com/statistics/194728/customer-satisfaction-with-us-marriott-hotels-since-2008/ (accessed 27 March 2021)
Marriott International (2021) We are Marriott International, available at: https://www.marriott.co.uk/marriott/aboutmarriott.mi (Accessed 27 March 2021)
Sebastian, D. (2021) Marriott Ends Its Hardest Year Ever With a Big Loss, Eyes Rebound in Year Ahead, available at: https://www.wsj.com/articles/marriott-posts-first-annual-loss-since-2009-11613652495 (accessed 25 March 2021)
Photo credit: Forbes.com
Author: Veeren Gowrea
Veeren Gowrea is a lecturer in Tourism & Hospitality management. He holds an MBA in Strategic Management and MSc in Human Resource Management from the University of Wales, UK. He also holds a Postgraduate Certificate in Higher Education (PgceHE) from Birkbeck, the University of London. He works as a visiting lecturer at a number of institutes in London.
M Rahman