Marriott: Teaching an Old Dog Some New Tricks

Hi everyone!

So as General Manager of The Heights, I was fortunate enough to receive an invitation to Boston College’s Chief Executive Club meeting on January 17th. The Club serves to gather many of Boston’s business leaders and connect them in an open setting. It then culminates with a keynote speaker from a prominent company, who discusses his or her recent work and plans for the future. Executives from Disney, Nike, IBM and the like have gone through its doors, and this past one featured Arne Sorenson, the President and CEO of Marriott Hotels. Along with meeting many amazing individuals and trying some very good food, I gained an awesome amount of insight from Sorenson and his various endeavors. As a result, I figured it would make sense to focus my first blog post on the recent experience and what I learned! Contrary to what I believed, there is much more to running a hotel than clean bed sheets and tiny shampoos.

The Renaissance Man

Marriott

Before getting into the bulk of it, a brief history on his career would help to preface: Sorenson started in litigation as a partner for the law firm Latham & Watkins in Washington, D.C. He then joined Marriott in 1996, acting as the Executive Vice President, Chief Operating Officer, Chief Financial Officer, and President of European Lodging (among other roles). Finally, he took over as President and CEO in 2012, the first person to ever do so without the last name “Marriott.”

More than that, he arguably came in as the most experienced and well-rounded one yet – after seeing the business world from so many different angles, he offers much more professional wisdom than anyone who simply led due to family lineage. Such well-roundedness has also put him in a strong position to handle increasing technology and challengers.

An Unprecedented Enemy

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Along the lines of that latter point, the main topic that he discussed was the rising pervasiveness of AirBnB. As the sharing economy grows, Marriott must now face a type of competitor that it has never seen before. In other words, how does one outpace a company whose only physical restriction is the number of homes worldwide?

Well, if you’re Arne Sorenson, apparently you conquer: the CEO recently acquired Starwood Hotels & Resorts for $14 billion in 2016. With 11 owned brands such as Sheraton and Westin, the acquisition will substantially widen Marriott’s reach and narrow down the hospitality industry as a whole. He’s not done yet, though, because apparently you build: he also unveiled his plan to construct a new hotel every 14 hours for the next 3 years. When fully mapped out, that’s about 1,880 hotels by 2020. While I cannot even fathom the logistics behind that, Marriott is clearly looking to beat out AirBnB in terms of tangible capital as well.

Furthermore, Sorenson plans to adjust his company to changing times and introduce unique technology. Included within this is a more efficient and user-friendly mobile app for booking rooms. When potential consumers can more easily navigate, they become more likely to buy. Additionally, he wants a complete overhaul of the grueling hotel check-in process, and allowing confirmed guests to remotely do so through that same application. This would significantly speed up the procedure and allow check-in employees to focus their efforts on more important matters. Thirdly, once they make it to their room, guests will notice very soon that they can also control much of it on their phones. Doors can be unlocked, televisions can be controlled, and lighting and temperature can both be adjusted. Although it will require a little more time to roll out, the notion of a “smart hotel” is certainly on the horizon for Marriott. Therefore, it will definitely look to keep pace with AirBnB with technological savviness.

Finally, Sorenson believes that his hotels offer a human element that AirBnb cannot – He emphasized throughout the talk that customer satisfaction was at the peak of his priorities. He has repeatedly taught his managers and employees to offer a warm welcome for all residents. Through kind staff and excellent service, he feels that he can enhance the nuances of one’s stay as much as possible. Simultaneously, though, Sorenson aims to constantly hear feedback from guests and fix any issues immediately. When someone has a problem or negative experience, he wants to ensure that such an event will never happen again. Lastly, he has formally incentivized his buyers to return through expanding Marriott’s Loyalty Program, which offers increasing perks for staying in more and more hotels. Therefore, especially when considering that AirBnB has no human-based aspects, Sorenson has undoubtedly positioned his company to stand out in cordiality.

Connecting to Class

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While these strategies all provide a great response to competitors, they also reveal some of the best ways to lead one’s company. Sorenson demonstrates a passion to scale and continue growing, to make Marriott a global monopoly for hotels. So long as he holds the reins, it will continue acquiring and building all around the world. Similarly, he conveys a willingness to learn and adapt in the face of new challenges, namely those of technological disruption in his industry. He has found a way to apply those changes and implement them within the core of his own business. Lastly, he has recognized Marriott’s competitive advantage in a superior guest experience and worked tirelessly to improve it.

So, in relating this experience to our course, I feel that the CEOs of our discussed companies could all learn at least one thing from Arne Sorenson’s leadership. He has clearly been successful in his five-year span, and I would love to compare his approach with those of other executives.

Moreover, I find his thoughts particularly applicable for this week of class, as we look to discuss AirBnB and its competitors. Despite recent regulations that have hindered its growth, the platform is clearly affecting hotel chains and how they operate (as made clear by Sorenson). This tension will only become more intriguing over time, as transportation becomes quicker and concepts like augmented reality become integrated into vacations. It will be very interesting to see how these two entities build off of each other as those changes come to fruition.

Finally, Sorenson ended his talk by saying that “people love traveling the world,” and “as long as that’s true, we’re going to be the best in our industry at giving it to them.” As we go through these various companies in our class, then, I am very curious to see how their respective leaders strive to say the same.

Additional Information

For anyone interested in learning more about this topic, here are some extra links that I found:

Sorenson and his vision: https://www.reuters.com/video/2017/10/03/spotlight-marriott-international-ceo-arn?videoId=372657034

Acquisition of Starwood Hotels & Resorts: https://www.cnbc.com/2016/09/23/marriott-buys-starwood-becoming-worlds-largest-hotel-chain.html

Marriott’s various brands: http://members.marriott.com/brands/

Competing with AirBnB: http://www.businessinsider.com/marriott-wants-to-be-the-next-airbnb-2017-9

Thanks for reading!

11 thoughts on “Marriott: Teaching an Old Dog Some New Tricks

  1. Great post! Before this unit, I always thought it was inevitable that Airbnb would win out over other hotels due to ease, quality, and its technology. However, after reading your post, I find the concept of a “smart hotel” really interesting. I think Marriott could be a viable competitor if their plans follow through. Your comment about how Sorenson wants to build a hotel every 14 hours made my jaw drop. If they continue that ambition, the notion that Marriott wins out might actually be plausible.

    Liked by 1 person

  2. Great post, Mike! For some odd reason, working for Mariott has been my dream job since middle school. Personally, I feel that Mariott hotels currently serve a different market than Airbnb. Their hotel chain is known for reliable quality in every stay, while Airbnb is often a riskier, but cheaper and more locally immersive experience. If these two segments blur together, which my guess is they will as Mariott is attempting to win over millennials (https://www.fastcompany.com/3047872/inside-marriotts-attempt-to-win-over-millennials), I’ll be very interested to see how the two compete.

    PS – so cool that you had the opportunity to hear Sorenson speak.

    Liked by 1 person

  3. Hey Mike! It sounds like that Chief Executive Club meeting was a really great experience! I was fortunate enough to stay at the Marriott in Copley Square and I saw a piece of technology that I had never seen before. In order to get to my floor, I had to tap a screen outside of the elevators and then an elevator was assigned to me. It seemed like this system was working very quickly because it would evenly distribute the guests and prevent the lag time of waiting for somebody to get off a floor below me. I am excited to see what other technology hotels will begin to implement!

    Liked by 1 person

  4. Thank you for bringing your experience and connecting back to the class, Mike! I had just watched Gebbia’s tedTalk, so it was interesting to see what the competitors of AirBnB are going through and how they’re preparing to compete with AirBnB. They seem like Marriott is doing a great job in securing customers by doing what they’re good at(services) and trying new things such as bringing in technology!

    Liked by 1 person

  5. Great post! I worked at an international hostel in Hollywood, CA, the summer going into my senior year of high school and ever since that experience I have been really interested in the hospitality industry (I also learned that it takes more than clean bed sheets and tiny shampoos!). The battle between the hotel industry and Airbnb is a classic case of technological disruption. Both parties have their own strengths and it is interesting to see how they react to each other and build out to compensate for competition. I disagree with the statement that Airbnb has no human-based aspects: in their initial concept, and even with their newest advertising campaign, human interaction with locals and people of others cultures has been a major focus. They do, however, lack the formal infrastructure to regulate these human interactions and standardize quality like Marriot can with their hired employees.

    Liked by 1 person

  6. Mike, excellent post! It sounds like an incredible opportunity to hear from Sorenson. I can’t believe they are aiming to build a new hotel every 14 hours for the next 3 years. Not everyone can be the “Uber” of hotels like Airbnb, and I think Mariott does a great job catering to the audience that wants a more traditional hotel experience. The “smart hotel” features you discussed are great steps for Mariott to keep up with the times and beat out competitors. With all of this change, I still hope to see the tiny shampoos!

    Liked by 1 person

  7. Mike, great post. Do you think that there will always be a large enough population of people who just distrust Airbnbs and will not stay in them due to lack of trust? Also, I think its an interesting point that the CEO Sorenson thinks its the HOTELS, not the Airbnbs, that provide the human experience. I would think it would be completely the opposite, as with Airbnbs, you deal with real people, but with Marriott you deal with paid employees (who are at least paid to be nice).

    Liked by 1 person

  8. Loved this post Mike! I think it is crucial for Marriott to recognize Airbnb and respect them as a competitor, but it is equally important for Marriott to leverage their own goodwill as a luxury hotel service. There is real shift toward Airbnb, but many people still associate a “vacation” with a fancy resort, pool, spa, and the likes. I appreciate your humor as well: “there is much more to running a hotel than clean bed sheets and tiny shampoos.”

    Liked by 1 person

  9. I loved this post! I was speaking with someone earlier today about how some hotels lack personal connection–something that AirBnB has seemed to master! However, after reading this post, I understand that that personal connection/interaction is something that Marriott puts a strong emphasis on. Additionally, it’s great how Sorenson is so adaptable to the technological changes that are occurring in the world–and the fact that he wants to bring them to the Marriott is even better! I’m excited to see the execution and what Sorenson will do to the hotel industry (especially when competing against AirBnB). So cool you got to hear him speak too!

    Liked by 1 person

  10. Great post, Mike! It’s interesting to see how much the existence of AirBnB has “woken up” the longstanding hotel industry. On the flip side, I haven’t really noticed the taxi industry having a similar (and by similar I mean trying to be better than the competitor) reaction in regards to Uber. I recently wrote a blog post discussing the IoT, and it’ll be very interesting to see how hotels leverage the technology to make their living spaces more technologically advanced than any AirBnB home could be.

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