The recent data breach is a big concern for Marriott International, but executives say the company is dealing with it, while continuing to prioritize innovation, loyalty advancements and growth. Europe in particular is a ripe target for future growth.
BERLIN—Marriott International has growth, unification and forward motion clearly in its crosshairs globally and particularly in Europe.
Liam Brown, president and managing director of Europe for Marriott, addressed how Marriott is handling big-picture challenges, such as its recent data breach, loyalty and tech innovation at the recent International Hotel Investment Forum. Carlton Ervin, the Marriott’s chief development officer in Europe, dove deeper into the company’s top priorities in Europe.
Brown spent some time discussing how Marriott has been dealing with the data security breach of the legacy Starwood Hotels & Resorts Worldwide reservations databases.
“It is not good,” Brown said of the incident, which was first announced last year and involved Starwood’s since-retired database. “Our forensics are complete, and our mission is to continue to work to ensure we have the trust of our guests.”
On Marriott’s fourth-quarter earnings call with analysts earlier this month, President and CEO Arne Sorenson said Marriott has not seen any material revenue-per-available-room impact as a result of the breach. Then on 7 March, Sorenson shared more details of the data breach in a testimony before the Senate Committee on Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations.
Brown said Marriott is committed to moving forward.
“Our mission … is to learn from this to figure out where the opportunity is to have more robust systems and make sure it doesn’t happen again,” he told IHIF attendees.
Technology innovation across the board is particularly important for Marriott, he said, and not just when it comes to data security, but also guest satisfaction.
“How do we use technology to enable people to make their jobs easier?” he asked. “Our ambition is to be able to look at the data we get (at all hotels) and figure out how to use it to fix things that will make guest satisfaction go up, based on that data, because at the end of the day, the guest is the true profit center for all of us.”
Balancing high-touch environments with high-tech ones is a delicate process, he said, but keeping guests first in that equation is the priority.
“With tech you have the ability … to eliminate some transactions with the guest, which frees up (associates) to focus on high-touch experiences with the guest,” he said. “The most magical moments are the human experiences you have, whether it’s with our associates, or whether our associates have facilitated the experience.”
Brown also gave an update on Marriott’s partnership with home rental management company Hostmaker, which is in pilot phase in London, Paris, Rome and Lisbon.
“At the end of the day, 20% of our (loyalty) customers have looked at or booked a home rental-type of experience … and the average length of stay in the test was six to seven nights, with multiple family members, primarily for leisure,” Brown said. “We’re focused on this. If it’s something we need, why don’t we offer it?”
Specifically in Europe, Marriott is focusing on growing its room count at the upper end of the chain-scale segments, as well as in the lifestyle categories.
“We want to be No. 1 (in Europe) where it matters—luxury, upper-upscale, upscale and affordable lifestyle,” Ervin said. “We’re doing well against our goals.”
He said the company has done a lot in recent years to ingratiate itself into Europe, and as a result has seen progress, particularly when it comes to soft branding at the high end of the scale, and in lifestyle brands, such as Moxy by Marriott.
“We had no idea with Moxy how successful it would be,” Ervin said. “It’s filling a niche that wasn’t occupied.”
Marriott had 25 Moxy hotels open in Europe, with 68 in the pipeline as of 31 December 2018. Region-wide, Marriott operates or franchises more than 580 hotels in 41 countries and territories in Europe, with more than 250 in the signed pipeline.
On the soft-brand side, Ervin said it’s been exciting to see the opportunities brands such as Luxury Collection, Autograph and Tribute Portfolio give owners, especially in Europe.
“These are brands that are much more responsive to European needs,” he said. “These brands let us respond to the desire for our brands in Europe that we couldn’t a few years ago.”
At IHIF, Marriott showcased elements of the redesigned Sheraton brand—a brand Ervin said has been challenging, but that also carries big opportunities.
“The bandwidth became so big that you’d have people saying they stayed at a great Sheraton in one location, and a not-so-great one somewhere else,” he said. “It became a harder brand to develop and the thing it had going for it was distribution.”
Now, he said, Marriott “pruned the worst ones from the system, and we’ve re-invented the Sheraton brand so that it becomes a growth vehicle for us in a way it wasn’t necessarily for Starwood.”