Is your first impulse to check Expedia or TripAdvisor before a hotel brand’s website? You’re not alone. Over the past decade, Online Travel Agencies (OTAs) have experienced the strongest revenue growth of all hotel distribution channels – bad news for large hotel brands like Marriott International given high OTA commissions of 15-30% . As OTAs start to offer their own points-based loyalty programs that compete with Marriott Rewards, many fear this trend will only accelerate .
For Marriott, digitization of the service experience is one key answer to the OTA competitive threat. Hoping to give Marriott a leg up in the competition for direct consumer relationships, CEO Arne Sorenson noted his “focus on technology to provide a more seamless and customized experience for travelers” . Providing this experience requires integration between upstream portions of the supply chain that prepare for service delivery and downstream portions that interface directly with each consumer and can interpret his or her unique needs. Information must travel fast, and systems must be flexible to cope with non-standard demands.
Today’s focus: A more agile service supply chain
In hotels, services that need to be customized to individual guests have historically involved layers of middlemen in the service delivery chain. Since 2015, Marriott has been attempting expedite services through its use of the Marriott MobileApp to directly deliver information from operating systems to the guest .
For instance, checking into a room typically requires two transfers of information: from the operating system to the front desk, and from the front desk to the consumer. Marriott Mobile Key – now offered at 30 properties – eliminates the middle step of this chain by allowing the guest to check in remotely and use their phone as a key, bypassing the front desk . Similarly, the app’s Mobile Requests feature allows guests to request on-property amenities and services specific to their own needs with no intermediary interaction; even highly custom requests can be communicated using the app’s 2-way chat feature .
Marriott hopes to use machine learning and AI to improve the quality of customization: for instance, tailoring recommendations provided over the 2-way chat feature based on the guest’s profile and historical stay behavior . Thom Kozik, VP of Global Loyalty at Marriott, told Skift: “Whether it’s posted information on social media or shared locations — we can make more attuned suggestions to you later this year. It’s all about data and how we can use machine learning to go one step further” .
While the most immediate application has been messaging, one medium-term application will be physical customization of the guest room experience . Hotel brands have begun to consider personalization along axes such as color of room lighting, genre of music, and scent . By investing more in customer knowledge, Marriott will be more capable of delivering a truly differentiated custom experience.
By hosting value-add features on owned technology channels like the MobileApp, the company can restrict a tangible benefit to guests who book direct. By using machine learning to improve execution with increased stays, the company can also motivate guests to maximize share of wallet with Marriott.
Looking forward: The next frontier of enabling technology
While Marriott has made significant strides at the global corporate level, I believe the company should turn its focus to advancements at the property level.
For app-enabled features like Mobile Key, the company has now created a platform for flexibility and control by the end consumer. A key short-term investment the company should now make is in scaling up paired technology at properties to respond to this demand. The 30 properties capable of using Mobile Key represent less than 1% of 6,000+ global Marriott hotels, suggesting most of the opportunity to move the needle still lies in the future .
In the medium-term, providing deeper personalization requires access to information about each guest’s interactions with the entire Marriott ecosystem, enabled by integrated technology systems. As the company prepares to merge with Starwood Hotels and Resorts, it must carefully manage the significant risk that visibility could decrease due to the IT challenges inherent in combining two systems and databases .
Once the merger is complete, the company will still be left with the challenge of bringing more aspects of guest insight into its mainframe technology platform. Today the platform integrates several facets of guest insight – e.g. booking and Marriott Rewards data; however, in order for it to be truly effective I believe it should bring in other verticals such as spa or food and beverage [13, 14].
Going forward, my primary questions involve the extent of investment these technological changes will require. Which customization initiatives should be scaled up, in the context of limited technology budgets? Considering the holistic and long-term nature of these programs’ intended impact, how can the company best measure ROI to make informed investment decisions?
 Jill Barthel et al., “OTAs – a Hotel’s Friend or Foe? How Reliant are Hotels on OTAs?” HVS Global Hospitality Report (July 2015), HVS International, Business Source Complete, EBSCO, accessed November 2017.
 David Eisen, “Arne Sorenson on why Marriott’s success is never final,” Hotel Management, February 28, 2017, http://www.hotelmanagement.net/development/arne-sorenson-why-marriott-s-success-never-final, accessed November 2017.
 Alex Samuely, “Marriott expands mobile requests as keyless room entry takes flight,” Mobile Marketer, November 18, 2015, https://www.mobilemarketer.com/ex/mobilemarketer/cms/news/strategy/21718.html, accessed November 2017.
 Marriott International, “Mobile Check-In,” http://mobileapp.marriott.com/#check-in, accessed November 2017.
 Chantal Tode, “How Marriott is using mobile messaging to transform visiting a hotel,” Mobile Marketer, May 15, 2015, https://www.mobilemarketer.com/ex/mobilemarketer/cms/news/messaging/20443.html, accessed November 2017.
 Deanna Ting, “What Marriott Learned from Starwood’s Loyalty and Digital Expertise,” Skift, February 13, 2017, https://skift.com/2017/02/13/what-marriott-learned-from-starwoods-loyalty-and-digital-expertise/, accessed November 2017.
 Connie Rheams, “Winning Strategies for Personalizing your Guest Experience,” Hotel Business Review, n.d., http://hotelexecutive.com/business_review/1708, accessed November 2017.
 Marriott International, “About Marriott,” http://www.marriott.com/marriott/aboutmarriott.mi, accessed November 2017.
 Deanna Ting, “Marriott CEO: Technology is the Biggest Risk in the Starwood Merger,” Skift, May 9, 2017, https://skift.com/2017/05/09/marriott-ceo-technology-is-the-biggest-risk-in-the-starwood-merger, accessed November 2017.
 Marriott International, “Hotel Development,” https://hotel-development.marriott.com/?stop_mobi=yes, accessed November 2017.
 “Rethinking the Current State of Hotel Technology,” September 22, 2017, Skift, https://skift.com/2017/09/22/rethinking-the-current-state-of-hotel-technology/, accessed November 12, 2017.
[A] “20 Years of OTAs: How They Transformed the Hotel Industry,” December 13, 2016, Represent Asia News, http://representasianews.com/20-years-of-otas-how-they-transformed-the-hotel-industry/, accessed November 2017.
[B] Marriott International, “Mobile Check-In,” http://mobileapp.marriott.com/#check-in, accessed November 2017.
[C] Marriott International, “News Center,” http://news.marriott.com/2017/09/marriott-internationals-ai-powered-chatbots-facebook-messenger-slack-alofts-chatbotlr-simplify-travel-guests-throughout-journey/, accessed November 2017.