Marriott International: The Next 90 Years Case Study Solution
Home Sharing
Another major threat for Marriot International is the emergence of home sharing businesses across the world. The major player in this sector is the Airbnb with extensive expansion after its commencement in 2008. Home sharing businesses enable the travellers to find and rent private rooms or the entire homes. It provides a complete experiences to travellers with home accommodation facility. These business act as a link between the host and the traveller and charges a commission on both parties for their services.
The dramatic expansion of these business with Airbnb having three times as listings as Marriott international rooms and the changing travellers preferences towards home sharing accommodations could lead to a decline in the occupancy rates of Marriot International.
Marriott’s Response to the Competitive Environment
With its innovative nature, Marriott International went through certain changes in response to the emergence of the OTAs and Home sharing businesses. It went through certain changes in its business strategy, organizational structure and culture. These changes were held through a major merger with the Star wood Hotels and Resorts in 2016, which turned Marriott International into the largest hotelier in 2016, and through certain experiments to increase the customer’s experience at Marriott International. The Star wood was offered a purchase price of $12.2 billion at a share price of $73 per share. However, with certain negotiations the Marriott International paid $13.6 billion for the Star wood to become the world’s largest hotel chain.
One of the major step taken by the company was the introduction of the loyalty programs to encourage direct booking in order to reduce the distributional costs in form of the commission paid to the OTAs. The total number of members of the loyalty program was 100 million increased form the 54 million in 2015 after the merger with Star wood. Moreover, in response to these changes Marriott increased its attention towards Research and Development and build an underground lab to tests various experiments aimed at improvising customers’ experience at Marriott International.
All of these changes including the change in the business model, the organizational culture, etc. enabled Marriott International to maintain its occupancy rates even after extensive emergence of the competitive business in form of OTAs and Home Sharing businesses. However, these changes do not seem to maintain the occupancy rates of the Marriott International in long run. Therefore, in order to be the leading hotel business in the long run as well, managers at Marriott International must take certain long term steps to maintain its position in the long run.
Conclusion
The emergence of the OTAs and the Home Sharing businesses has lead Marriott International to put up certain changes in its organizational strategy and culture and adopt various strategies to improvise the customer experience at its hotels. Although, the emergence of these businesses has not reduced the occupancy rates of Marriott yet potentially, but, it could pose a severe threat to the Marriott’s position in the long run. Therefore, the managers at Marriott must take certain long term actions to improvise the customer experience at its hotels and increase it occupancy rate.........
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