Marriott International executives and institutional investors gathered recently to discuss the latest trends in the hospitality industry, the company’s financials, and prospects for international growth. Here are 4 trends to watch as the Bethesda-based hotel giant continues to adapt to changing customer preferences:
1. More hotels — and presumably higher profits — in coming years.
Marriott announced plans to open 1,300 hotels — or more than six properties per week — by 2017. That would bring the company’s total number of properties to more than 5,000. This aggressive growth plan, executives said, is fueled by economic growth and a rising middle class, particularly in Africa and Asia, where Marriott is focusing its expansion efforts. Carl Berquist, chief financial officer at Marriott, expects revenue per available room — a closely watched industry metric — to rise between 4 percent and 6 percent each year until 2017.
2. A changing international model.
When Marriott began expanding to other countries nearly five decades ago, the company’s focus was on catering to American tourists. In recent years, the company has adjusted its strategy to attract more locals around the world. Hotels and guest rooms are now changing to accommodate cultural nuances. In India, for example, Fairfield Inn hotels serve three meals a day and are simply called “Fairfield” as, according to Stephanie Linnartz, Marriott’s chief marketing and commercial officer, “The word ‘inn’ as understood in India does not adequately convey the high quality of the product, so we dropped the word from the brand name.”
3. More technology-fueled changes.
The most sweeping change to hit the hospitality industry is the rise of technology. As a result, Marriott is now introducing mobile apps to help guests check in and out of their rooms. Another interactive app helps meeting planners request more coffee and pastries without leaving the conference room. The company’s rooms and common areas are also being revamped to include more gadget-friendly nooks and WiFi capabilities. The company is also looking to social media to drum up interest for its hotels, particularly among younger guests who are expected to account for a large portion of business travelers in coming years. According to Linnartz, social media “is a very cost-effective way for us to reach Gen Y.”
4. New hotel brands.
For decades after its founding, Marriott had just one brand: its full-service namesake line of hotels. That began to change in 1983, when the company introduced Courtyard, the country’s first mid-priced chain designed for business travelers. Fairfield Inn and Marriott Suites followed four years later. This trend continues till date with the Marriott brand now owning nearly 18 brands—including the Ritz-Carlton, Renaissance and Moxy Hotels. That’s double the number it had in 2000. According to Linnartz, “When we think about new brands, it’s when there’s a new customer segment to reach or when there’s a new market to enter.” (image via Shutterstock)