Marriott International Hotel: Business Analysis
Posted: November 7th, 2023
Marriott International Hotel: Business Analysis
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Executive Summary
The Marriott International is one of the most recognized hotel brands in the world. The hotel chain has been able to withstand the socioeconomic turmoil caused by the coronavirus to grow, including acquiring other top hotel brands. This report aims to provide a brief glimpse into what makes the Marriott Hotel successful, especially regarding employee and customer retention. The paper looks at the organizational structure, leadership, internal control, and even ethical guidelines employed by the corporation. The Marriott International is acknowledged for its expertise in transforming the hospitality sector into a customer-centric business, centered on enhancing stakeholder experiences. The report finds customer satisfaction to be a highly complex factor in the hospitality industry, which is why hotels need to rely on their employees. Ascertaining high levels of employee welfare and empowerment is key to having satisfied and return clientele in the hospitality industry.
Contents
Marriott International Hotel: Business Analysis. 4
The Organizational Strategy. 4
The Organizational Structure. 5
The Five Aspects of Marriott’s Work Structure. 5
Strengths and Weaknesses of the Formal Divisional Structure. 5
Communications at the Marriott 6
Interest in Joining the Organization. 8
Marriott International Hotel: Business Analysis
The name “Marriott” exemplifies quality and customer service in the hospitality industry. The chain of hotels is perhaps the first name that would spring to mind when a person is considering hotels, thanks to its prestige. Founded in 1927 by William Marriott, the hotel brand has grown to include over 3400 businesses and hires over 140000 employees across 70 countries. The Marriott has been growing by adding properties, including acquiring other hotels and resorts. However, the company has been struggling with reduced revenues since the onset of the 2020 coronavirus pandemic. This report will provide an analysis of Marriott Hotel’s business approach, including its organizational structure, strategy, leadership, control, and ethical policies. The objective is to identify the factors that make the brand attractive to consumers. The Marriott continues to be known for its sense of community and emphasis on customer innovation. Despite growing challenges in the hospitality sector associated with globalization, Marriott International will continue growing due to its excellent employee engagement, focus on innovation, service differentiation, and exemplary customer experiences.
The Organizational Strategy
Vision and Mission
The Marriott Hotel seeks to become the premier provider and facilitator of vacation and leisure experiences for people worldwide. The company’s mission is to enhance the lives of its customers by creating and enabling leisure experiences that surpass their expectations (Marriott, n.d.). An analysis of the two statements highlights that the goal is quite simple; for the organization to lead a legacy of excellence in the hospitality sector. The chain of hotels aims to be the choice of destination for people throughout the world. The goal explains why Marriott’s core values are putting people first (1), pursuing excellence (2), embracing change (3), acting with integrity (4), and serving the world (5) (Marriott, 2009). The company might change, grow, and evolve, but the values important to them remain the same.
Business Strategy
Marriott International adopts a generic approach to market its products and services in the competitive hospitality sector. The organization operates as a global franchise for lodging and hotel services. The approach allows the institution to focus on one aspect, becoming the top player in the accommodations market. The generic strategy takes advantage of operational aspects, such as cost and service uniqueness, to enable a firm to become more effective than its competitors (Islami et al., 2020). However, Marriott International follows a variety of methodologies at the entrepreneurial level. Proof of this is seen in the company’s diverse brand portfolio, which is advantageous in giving Marriott a strong market presence. It is known that the hotel owns several businesses, including other lodgings and resorts. The diversification strategy is part of the hotel’s bigger differentiation strategy. Given that the Marriott owns many hotels across different levels of the hospitality industry, it can offer clientele services ranging from average to premium (Locker, 2019). Ownership enables the brand to integrate value addition into the other hotels under its management, warranting it to demand a higher premium price.
The Marriott implements its differentiation strategy by executing market segmentation across every operational level. The company acknowledged that a single hotel enterprise or brand could not cater to all the distinct demands and requirements of vacation guests (Locker, 2019). Therefore, management adopted an extensive strategy for differentiation by developing new and different hospitality brands. In its service portfolio, Marriot’s products will range from high-end to low-end. An example of upmarket braches includes the Ritz Carlton and Spas. On the other hand, the Marriot Courtyard is an intermediate suite due to its in-room designs that are suitable for business persons (Locker, 2019). Lower-end amenities will include hostels that offer living quarters with full-size kitchens and sleeping arrangements. The segment is suitable for the traveler, an individual searching for low-cost facilities because of the frequency of use and the number of users per household. The Marriott ensures that it adds a little bit of quality and luxury to every brand it manages to be able to demand a relatively higher price. As seen, Marriott’s segmentation strategy is what facilitates its differentiation.
The Organizational Structure
The Marriott follows a “Division of Work” structure, where each employee is aware of their distinct role and the sequence for coordinating tasks. The working model arranges people and functions into distinct corporate areas and levels, including decision-making authority, accountability, and relationships (customer service). The effectiveness of the organizational structure is dependent on the firm’s form. How well the employees specialize and coordinate functions determines overall organizational performance.
The Five Aspects of Marriott’s Work Structure
Formalization: The principle is associated with bureaucracy, meaning that each function and activity in the organization follows a strict set of rules and procedures. Employee job descriptions and limits are well-defined, with little room for flexibility (Boone & Kurtz, 2010). Therefore, it is difficult for workers to replace each other or for management to meet new demands.
Specialization: Each employee is made aware of their duties and the pathway to refining the skills required for the job. The aspect focuses on how well employees can fulfil their duties and responsibilities. The approach simplifies managerial control by marking job distinctions.
Centralization: The work structure means that all critical decisions and orders are made from the Hong Kong main office. The general manager oversees the entire business and is responsible for making decisions that affect the entire company, including acquired hotels and resorts (Boone & Kurtz, 2010). While the company does allow its brands to make individual decisions to meet local tastes and demands, they still have to abide by some collective rules and orders.
Hierarchy of Authority/Departmentalization: The principle follows the chain of command in the organization. The Marriott places subordinates in each branch and department to take orders from the general manager.
Personal Ratio: The principle centers on employee development and satisfaction. In pursuing specialization, the Marriott invests in trainee programs to improve skills and competencies, climb up the corporate ladder, and fulfill personal career goals. The approach helps the hotel ensure that each employee can cater to the needs of multiple clientele.
Strengths and Weaknesses of the Formal Divisional Structure
The work structure works well because it allows employees and teams to focus on one product or service. Specialization improves the quality of service delivery, which in turn guarantees customer satisfaction (Bhatia & Arora, 2016). The division of labour also simplifies the leadership structure. The linear flow of information improves the sharing and implementation of strategic objectives. The formal division structure has enabled the Marriott to build a common culture of innovation and service improvement. The need to specialize and improve personal competencies aligns with the corporate goal of establishing continuous improvement. Therefore, the organizational structure contributes to employees having higher morale. Such an approach is better than having products and services distributed among multiple organizational branches.
A formal divisional work structure can result in functional incompatibilities. A high degree of specialization can impede collaboration between people and compatibility between systems (Bhatia & Arora, 2016). The work model can result in company products being unsuited for internal business units. On the other hand, departmentalization can be a cause of office politics, impeding collaboration and communication between departments. For instance, different departments might dispute the allocation of resources, perceiving that the overfunded department is undermining the other.
Organizational Leadership
Leadership at the Marriott
Management at the Marriott displays attributes of authentic leadership, meaning management and communication are applied to inspire loyalty among employees and clientele. The CEO, Arne Sorenson, shows her true self when dealing with stakeholders. According to Gallo (2020), the CEO sends frequent videos to employees, customers, and shareholders when conveying important news regarding the company. “The leader’s messages feel heartfelt and inspiring”, was one of the employee’s sentiments regarding a video sent to her by Sorenson (Gallo, 2020). The Marriott emphasizes the delivery of good and bad news on a face-to-face basis. The approach allows management to tear off the band-aid when it comes to negative information. The degree of authenticity creates the sensation of a shared show of sacrifice between management and the workforce. Sorenson’s authentic leadership must have played a critical role in worker and customer retention during the coronavirus pandemic.
Marriott’s leadership shows a significant degree of risk-taking. The Marriott is well known for embracing change and innovation because its leaders are risk-takers. For instance, the Marriott family does not focus on the hotel business alone. The company has risked by venturing into more logistical businesses, such as restaurant chains. According to Bill Marriott, “sticking with the familiar and playing it safe might feel like the sensible thing to do, but it results in an organization and its people stagnating and languishing (Warrell, 2016). Marriott’s leadership does not like it when employees and management become comfortable, explaining why the leaders constantly seek out new business opportunities or ways to improve existing processes. Marriott International recently acquired the $13.6 billion Starwood Hotels, which is regarded as one of the boldest moves in the hotel industry (Warrell, 2016). The Marriott would not have been able of such industry-defining moves were it not for its risk-taking and visionary leaders.
Communications at the Marriott
The Marriott leverages the latest in information technologies to facilitate its communications. The strategy applied is reliant on the end receiver. For instance, when it comes to consumers, the company uses mobile messages to keep clients up-to-date with loyalty programs, offers, and new services, among many other functions. Tode (2017) believes that what is unique about Marriott’s mobile messaging platform is that it allows potential guests to chat with the hotel to make arrangements for their arrival. Most hotels require a person to call or book online, which is more time-consuming and cumbersome. The approach is advantageous to the Marriott because it allows customers to consume other auxiliary services, such as car rentals and in-room amenities. The Marriott also contains a global communications rollout service. The platform is available to the 50 million guests legible for Marriott’s rewards (Tode, 2017). It is evident that technology not only facilitates communication in the company but also it is a means to respond to changing consumer behaviours.
The Marriott uses communication to become more inclusive and receptive to people from different backgrounds. The corporation introduced a 23-hotel pilot language program to teach and train employees in English, Spanish, and life skills (Hampton, 2007). The program helps ensure employee-client interactions result in first-class, personalized services at each level of contact. Training guarantees effective cross-cultural communication with clients (Qadri et al., 2016). Language proficiency also plays a critical role in the larger goal of creating career progression opportunities for employees. Regarding stakeholder communication and management, the Marriott is known for using personalized video messages (Gallo, 2020). Leadership often releases short videos to appear authentic while improving information delivery through brevity.
Organizational Control
Strategic metrics play an essential role in helping an organization meet its long-term goals. The Marriott ensures its employees commit to regular reporting to ensure the company has information regarding their concerns and desires while keeping track of their happiness and satisfaction (Boone & Kurtz, 2010). When it comes to financial ratios, one has to cover profitability and liquidity ratios. As of 2021, the company’s cash ratio has remained static for four years, standing at 4% (White, 2021). The gross profit margin has remained within the same margin for the last three years. However, the Marriott has increased its debt significantly. The issuance of long-term debt in 2020 increased by 59.5%, while repayment for debts increased to 126% (White, 2021). The poor fiscal performance highlights the impact of the coronavirus pandemic on the hospitality industry. Marriott relies on its partnerships with international tech firms for the smooth implementation and maintenance of its information systems. For instance, the company entered into an agreement with Micros Systems Inc. for the company to execute Micros property management system (HM Staff, 2013). The information system is designed to address the needs of any hotel, regardless of its size or operations. Partnerships with tech firms ensure that the Marriot benefits from proven systems with stable and navigable features.
Ethics and Innovation
Technical Innovation
Marriott’s technical innovation is one of the primary reasons why customers keep staying at their properties. The organization ensures that its customers can do everything they do at home or the office while staying at any of their properties. As a result, the hotel is very up-to-date with the latest technologies that help consumers maintain their competitive edge. For instance, the company introduced a pilot program for contactless arrival kiosks in several select branches (Fox, 2021). The digital kiosks allow Marriott’s partners to stock goods for customers to grab and go within the hotels. Consumers can also make mobile dining requests from the digital kiosks (Fox, 2021). Important to note is that technology plays a critical role in facilitating connectivity and convenience in the hospitality sector. Guests are open to the concept of trying new and advanced technologies to boost their experience and productivity.
The Marriott invests in research and development to ensure its rooms and services are beyond anything else experienced by consumers. According to Locker (2019), the organization has an innovation lab with a series of model rooms that researchers use to experiment with different service offerings. The design that results in the most user satisfaction is transferred to the Marriott Hotel’s actual rooms. The innovation lab is built to ensure the hotel meets the distinct needs of its diverse clientele. For instance, consumers in New York will be fascinated by different service offerings compared to clientele in Hanoi. The innovation lab is also meant to help the Marriott respond to the increasing competition from Airbnb. For instance, the lab led to the design of home rentals as a subsidiary hotel service (Locker, 2019). As opposed to living inside the hotels, clients can book similar offerings from the company, but externally.
Ethical Issues
The Marriott is branded and ranked as one of the most ethical international corporations. The company constantly features in such lists due to its commitment to ethical business practices. The good ranking indicates that the Marriott conducts business operations in a socially responsible and accepted manner. The company has exhibited a high commitment to human rights protection for over eight decades. Such an ideal is seen in the company’s advocacy against the sexual exploitation of children in the tourism industry (Marriott, 2009). The company has long partnered with community agencies to identify and support vulnerable children and youth. As of 2009, the company supported more than 1.2 million children from communities prone to human trafficking (Marriott, 2009). Advocacy for child rights and protections is one of the Marriott’s most visible CSR initiatives. Unlike in other industries, hoteliers must be more visible in their CSR due to human rights concerns dominating the industry.
One of the ethical areas the Marriott has been dealing with in recent years is environmental sustainability. An increase in hotelier services by customers and growing consumer awareness of green concepts forced the organization to assess and control its contributions to the environment (Bratton & Gold, 2017). Each Marriott hotel is subject to different state legislations regarding the environment, which increases the complexities of compliance. For instance, the Environment Protection Act (1990) prevents the hotel from constructing in any areas near natural animal habitats (Nethery et al., 2020). Each construction has to be vetted for its impact on local biodiversity. The approach is equally based on the fact that punitive measures for environmental violations can be detrimental to the company’s bottom line. As a result, each major Marriott Hotel has predetermined measures for environmental features, such as air quality, energy consumption, and waste management.
Interest in Joining the Organization
The Marriot International is a top diversified hotel with a rich history of providing accommodation and leisure services for over eight decades. The company has earned itself a reputation for service excellence, innovation, inclusivity, and integrity (Pulkit, 2016). I drew my first interest in the firm while working in one of its subsidiaries. Working with one of its brands allowed me to see first-hand how it transfers and promotes quality and service attitude across all its staff. As a business management scholar, one must be impressed by the company’s professionalism, given that thousands of employees exhibit the same principles and values. I believe joining such an organization would equip a person with superior leadership skills. Moreover, one gets to learn how to create and apply an information pipeline to ensure products and services reflect customer expectations and desires.
The Marriott International is a good place to learn how to take care of employees in the contemporary labour market. The hotel recognizes that strategy is not the cause of superior customer experiences but the staff members (Gibbons, 2020). Salaries, wages, benefits, and career progression opportunities are provided equally across the organization. Joining the organization will teach the future leader how to prioritize employees in the same guests normally are treated. Even with the satisfaction of worker needs and requirements, the endeavors must be linked to the company’s purpose and strategic objectives. Research shows that employees who perceive leaders have their best interests in mind are more receptive to changes, compliments, and criticism (Gibbons, 2020). As a result, they are more loyal, making it easier for a firm to retain them.
Conclusion
In the world of globalization and internationalization, few hotels have been able to survive and thrive because of their understanding of customer behaviour and cross-cultural communication. The Marriott International remains a global leader in the hospitality industry despite these challenges. The hotel chain relies on its generic business strategy that leverages operational costs, service innovation, and service uniqueness to foster growth. The Marriott also deploys a differentiation strategy designed to ensure the company maintains a strong presence across all levels of the hospitality sector. From a CSR perspective, the company is heavily committed to employee development, community empowerment, and environmental conservation. Human resource management is perhaps the company’s strongest feature, as the hotel is known for its high employee satisfaction and retention levels.
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