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Marriott Executives Explain the Brand’s Internal Strategy Shift at MIT

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Skift Take

Marriott’s internal story about how it’s repositioning around technology, innovation, and an appreciation of both the individual guest and staff member resonates with Marriott’s target Gen Y/Z audiences.

— Greg Oates

Two of Marriott’s key executives responsible for driving the hotel group’s corporate culture turnaround spoke at the MIT Design Driven Innovation conference this week in Boston.

Matthew Von Ertfelda, VP of insight, strategy & innovation, discussed the marketplace factors driving the company’s future brand strategy and development. Then Mariana Cavalcanti, VP of digital guest experience, gave an overview of how the brand is using technology to personalize the guest experience.

“Startups, entrepreneurs and disruptors are basically changing the game before most of us honestly can even learn how to play it,” said Ertfelda. “They are honing in on complacency in areas where the consumer has been overlooked or egregiously underserved.”

He explained three primary behavior and attitudinal shifts among consumers booking hotels today that impact everything Marriott is doing looking forward.

The first is the rise of millennials and Gen Z travelers who “forced Marriott’s hand” to develop new hospitality brands over the last few years, which includes the recent merger with Starwood Hotels.

The second primary factor guiding Marriott’s development is the continuing competition from online booking platforms, which Ertfelda said “threatens our direct relationship with the customer.”

The third factor is the exponential rise of Airbnb worldwide, and to a lesser extent, other room-sharing companies. “That is threatening brand preference, and brand preference for us underpins performance,” concluded Ertfelda.

Marriott executives have been pushing their internal shift in corporate policy hard since the company’s Blueprint for Innovation initiative kicked off three years ago. Everyone at corporate up to Marriott CEO Arne Sorenson has publicly stated that Marriott needed to completely pivot toward a younger audience to remain relevant.

The MIT presentation was a continuation of that. Ertfelda showed a corporate video with scenes including Sorenson examining hotel models at the Marriott Innovation Lab in the Bethesda HQ office. He also highlighted Charlotte Marriott, which the company owns, that is scheduled to open this summer as a test vehicle for all of Marriott’s newest product and digital innovations.

Marriott Shifts Emphasis Toward a ‘People Company’

The large international hotel brands like Marriott have always taken the brunt of criticism from independent hospitality groups and the industry at large about how the big chains lack a personal connection with their guests.

In fact, all of the small hotel groups position themselves as a foil to the legacy brands. Their very identity is based on their “independent spirit,” such as referenced this week by the Commune and Destination Hotels CEOs speaking about their merger, and the idea that, “We’re not Marriott.”

So all of the top brass at Marriott have been out in the field over the last year talking about how Marriott places the individual hotel guest, hotel associate, and member of the local community as its highest priority.

“We attribute a lot of our success to actually having a higher purpose, and our higher purpose as a company is to transcend travel to transform lives by putting people first,” said Ertfelda. “That means the lives of our associates, the lives of our guests, and lives of the people in the communities in which we operate. People and community will always be at the heart of what we do.”

Sorenson spoke along the same lines during his interview on stage at the PCMA Convening Leaders meetings industry conference in January.

Some would say that’s a bit of a reach. Delivering personalized guest attention is a tall order with 5,500 hotels across 30 brands in more than 100 countries.

Maybe, but maybe not. What does personal guest attention mean in 2016? Is it having the housekeeping staff say hello to guests when they meet in the hall, which is as annoying and obtrusive to many young guests as it is warm and welcoming to older?

Or is personal guest attention understanding your travel preferences and recommending a nearby local Vietnamese restaurant via the hotel app? If so, then it’s going to be the big brands with the resources to invest in technology that will be able offer that kind of personalized guest experience in the future.

Marriott’s Future is in Digital

Over the last 18 months, Marriott launched mobile check-in/out, remote room selection, keyless entry and beacon perks programs at some hotels, and a variety of significant content programs for both leisure and group markets.

Mariana Cavalcanti played an unpublished video at the MIT event that depicted a woman going through her day by managing everything with her phone. For example, after leaving the hotel for a lunch date she organized on her phone, she texts the hotel to say she’s going to be late retrieving her luggage. The hotel texts back to confirm. In another instance, the woman is digitally pinged in-app with a free coffee offer when she walks near a beacon in the hotel’s coffee bar.

That illustrates how Marriott is anticipating the rise of the younger “silent traveler” who avoids personal engagement with hotel staff, and wants as much opportunity for self-guided personalization as possible.

“Millennials want products made for them,” said Cavalcanti. “There’s no way you’re going to revamp Marriott Hotels without technology. That has to be the core of it.”

Looking forward, Marriott’s strategy focuses on activating public spaces with technology. One example is the 6 Degrees table that Marriott developed in partnership a couple years ago with MIT. When people sign up for the 6 Degrees app, they can find like-minded people at the table based on sensors below the table surface that reads social media profiles.

There’s also a 6 Degrees media wall prototype designed for guests and staff to engage with each other.

“Social media is key for brand knowledge and brand experience,” Cavalcanti told the MIT audience.

We haven’t heard any updates recently about the 6 Degrees table, but she insisted that the project is very much alive. MIT is now considering fabrication partners to move the prototype into production.

Cavalcanti is also looking at integrating destination content into the Marriott app, which could potentially be sourced from Traveler.Marriott.com and third party content providers. It’s also possible that a guest’s reading history of that content in the app could provide additional data to further personalize their profile.

“All of this digital technology is about developing a better understanding of who you are, and curating the guest experience for your specific needs,” Cavalcanti told Skift. “The question is, how do you layer in digital without losing the core element of what this company’s about, which is the individual guest? We have to find the balance between high tech and high touch.”

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