Marriott International intends to make a significant investment in customer-facing technology during 2023.
During the company’s Q4 earnings call, CFO and EVP of business operations Leeny Oberg said: "Spending in 2023 also incorporates higher than typical investment in our customer-facing technology, which is overwhelmingly expected to be reimbursed over time. We view the digital experience and the experience for our customers and for our associates … as being of critical importance over the next few years and forever."
"And so in that regard, we are very excited about the work that we are doing on our tech systems that really will transform the experience for the mobile app and for our guests as they plan and execute their stays with us. It will also transform the experience for our associates, which is critically important as well as we think about how they take care of our guests, most particularly, as they are able to interact with our Bonvoy guests to really address their specific needs."
Marriott’s president and CEO, Tony Capuano, added: "Product innovation and engagement with our members remain key focus areas, especially through investments in our Marriott Bonvoy app and other digital products."
"We have made great gains in contributions from our digital platforms, which are highly profitable channels for our owners and anticipate many additional enhancements over the next couple of years. In 2022, our mobile app users were up 32% year-over-year, digital room nights rose 27%, and digital revenues climbed 41%."
During the earnings call Oberg said Marriott’s total financial outlay (including a combined $260 million for the City Express acquisition and renovation of owned assets) this year would be between $850 million and $1 billion, “after three years of meaningfully reduced investment spending.” In 2021, Marriott invested an estimated $564m in information technology.
Along with the increased investment in digital comes the appointment of long-time Marriott executive Peggy Fang Roe into a new role to “evolve the Marriott Bonvoy loyalty program and develop the end-to-end customer experience using data, AI and innovation to fuel future growth,” the company said in a press release.
Westin case study
Vibhu Gaind is CIO of RBH Hospitality Management, a multi-brand management company with around 50 UK hotels. Commenting on the recently opened Westin London City, Gaind said: "It’s a prime example of where the technology and the brand are working really well."
"The true focus now is towards giving the customer journey as many meaningful touch points as we can. The main vehicle is the app and the contact points once guests are in the hotel. There’s an iPad in the room that can close the blinds, control the lights and temperature plus it’s an upselling tool, so you can make your dinner reservation, do all those clever things."
Gaind said that Marriott can send personalised messages/upsells if a guest is staying for a wedding anniversary, for example. Even simple segmentation – leisure, corporate, transient business – leads to meaningful communications and better customer service and revenue, he added.
In its first 12 months of trading, Westin London City’s RevPAR and GOPPAR were ahead of its competitor set by 20% and 3% respectively, according to RBH.
Gaind, who sits on the Marriott Technology Council, said: “Any model that has a high level of franchising, the franchisees have the material to provide the detail that the brand really needs. What the brand thinks really works might not be so fruitful on the ground so it’s that conversation, that dialogue, that really delivers meaningful business.”
During the Q4 earnings call, Oberg said Marriott was working with several third-party service providers to transform its systems.
Amadeus deal
For instance, Marriott is in the process of modernising its reservation infrastructure with the help of Amadeus, the IT giant best known for its work with airlines. The upgrade will expand Marriott’s commerce capabilities, including enabling travellers to personalise their travels, by providing greater flexibility in choosing guest room attributes, and purchasing products like spa and golf when booking a stay.
Marriott says there are 160 million members in its Marriott Bonvoy travel programme. Commenting on the audience for Westin London City, Marriott’s 1,0000th EMEA opening and London’s newest waterfront hotel, Gaind said: “Marriott and Westin have a very dedicated following and because of that you get a lot of engagement via the app. It’s upper-scale executives, a very aspirational brand so that drives a clientele who tend to engage a lot with the hotels. The biggest captive market is North Americans.”
Marriott’s focus on the digital customer experience is somewhat unusual for an industry that has often been tech-averse, observed John Burns, president, Hospitality Technology Consulting.
“Marriott’s statement is atypical because we have not embraced technology as enthusiastically as Marriott is describing here, so this is a recognition of reality. The world has gone digital. We in the hotel business have been … should I say in denial? We’ve certainly been hesitant, cautious, slow and Marriott is recognising the obvious.”
“More compelling presentation of the properties, better attention to upsell and better integration of loyalty and personalisation. The experience should get richer and when you look at the retail customer experiences of Amazon or Facebook or TikTok, we have a long way to go. Good on Marriott for saying let’s step up to it. It’s a challenge for all their peer hotel companies.”
