Marriott International Growth Strategies

This assignment examines the strategic management and growth strategies employed by Marriott International. It utilizes tools like SWOT analysis and Ansoff's matrix to evaluate Marriott's current position and potential future directions. The paper also considers emerging trends in the hospitality industry and their impact on Marriott's competitive landscape.

INTERNATIONAL
HOSPITALITY
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Background to international Hotel Industry ...............................................................................1
Background to hotel company....................................................................................................2
SWOT analysis of Marriott hotel................................................................................................4
Background to Global Hotel and Tourism Industry....................................................................5
Background Of emerging market................................................................................................6
PEST of Tourism market............................................................................................................6
Analysis of SWOT and PEST ....................................................................................................7
Strategies to be adopt and implemented while entering the market ...........................................8
Justification of strategy...............................................................................................................9
Practical application of strategy ...............................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Hospitality management has been in working since 17th century the word derive from the
word “Hospice” which means to provide services to weary and taking care of people who are
travelling (Mok, Sparks and Kadampully, 2013). Hotels and tourism has always been important
part of this management but with time the importance of hotels and tourism is increasing at very
rapid pace. The hotel sector contribute 15% of this management. In current time tourism has
been also emerging as one of the leading branch of this industry, it has become one of the
leading market where this hotel or industry is investing.
In current report we have taken Marriott West India Quay into account which is luxury 5
star hotels in London that is the part of Marriott International company that is known for its
broad list of hotel and quality services. The presented study give detail study of international
hotel industry and background of hotel company. It further divulges in market analyse of the
hotel and discusses the pros and cons of emerging tourism industry. The SWOT and PEST
analysis will be performed in order to get the better understanding of emerging market. It will
also recommend some suggestion and strategy that hotel can implement in order to enter the
target market.
Background to international Hotel Industry
Hotel industry are those type of business which provide people with basic hospitality
such as accommodation in lodging, food beverages etc. It also provides vast no. of varied
services that are organised and interrelated for public service (Buhalis and Crotts, 2013). Hotel
industry is emerging as the leading industry. The size of global hotel industry can't be measured
as the data available on its market is scarce and subjective. There is big range of hotel industry it
can be very small privately business to major international company with more than 100 hotels
and a thousand of room under its wings. This industry is spread all over the world from its
biggest continent Europe to its smallest island. There is no grading system for this, each country
have their own way through which they grade and quantify this industry.
Roman was considered as the first pleasure traveller they were the people who used to
travel the world for business. After the fall of Roman empire the public hospitality fall in the
hand of religious order. English traveller came into existence after the fall of Roman. In early
time there were no hotels small inn were provided for accommodation which was actually
1

private homes of people. This inn were open for normal people while nobility used monasteries
for there stay ( Harrington and et. al., 2014).
It was in 16th century that the demand for inn and tavern increased. The first ever hotel
was build by Henry the IV in 1788 which provided the accommodation for 70 people and has the
facility of 60 beds. Other than this Coffee house were also very famous at that time but it was
only open for nobility.
The French revolution bring the major change in the history of culinary there was
initiation of brigade system and modern restaurant was introduced by M. Boulanger. It also bring
many chefs to new world. In 1898 a hotel was opened in London and was named “Savoy Hotel”
What change the face of this industry was expensive hotel opened in year 1827 – 1923 in
New york city and named Delmonico it also provides Bilingual menu.
The World war 2nd brought many changes in this industry it gives boost to travels, cross
continental flights were introduced, people interest were increasing in travelling cruise were
there was resurgence of inner city lodging properties. It was also in this time that the first motel
was open in California.
From 1960 the changes we see today was implemented there were major growth in
casual dining. The chain off hotels were increasing at rapid pace, package travel living longer
many more facilities were initiated today.
Background to hotel company.
Marriott hotel is one of the leading hotel of London, its parent branch is located in
America that has several branches all over the world. There hotels are known for there
picturesque view and the luxurious service it provides to there customer. Its is included in the list
of the best companies in Forbes and also voted as fourth best company working in UK by The
Times in year 2009 (Ryan, 2015). The Marriott chain began with two motels but in current time
it provides there services in more than 122 countries all over the world, it has 6,000 properties
and has a turn over of $17 billion in year 2016. In early time company was only investing in
hotels but with time they also emerge in resort industry and open there first resort hotel in USA
and work to expand there business outside of US. Marriott hotel is birth mother of many
innovations. The first drive in East Coast was innovated by this company only, other than this it
2

was also responsible to open the very first motor hotel (Okumus, 2013). In current time company
is trying to find different market where they can merge and expand there business. Company has
shown there interest in tourism market as it has great scope in it which will provide company
with long term market growth. It also cannot be ignored or neglected that it was Marriott that
opened the first hotel chain especially designed for business traveller, It shows there clear
interest in the market of tour and travels company also realize that it how beneficial it can be for
them if they invest in this emerging sector of new world.
Marriott is known for there inventive ways through which they serve there customer, the
company which started merely as root beer stand has now turned into most superior business
operation in hotel industry and also is recognised as the company with top employer (Nieves,
and Segarra-Ciprés, 2015). Company from very early time investing in other sector so that they
can expand there business in early times they add hot food items in there menu then there
innovation of drive in all boost company to the road of progress, other than this company also
invest in totally new sector that was in airline catering they start delivering boxes lunches to
there passenger. Company is always ready to take risk venture into new business. Right now
country have more than 30 brands under it and more than 100 million combined loyalty member,
it continuously growing from the time it was established.
Illustration 1: Marriott hotel West India Quay
(Source: Marriott International, 2017)
3

SWOT analysis of Marriott hotel
Marriott hotel is one of the leading hotel in London, and also the whole world market,
having such a strong position in market has been its strongest point (Lin, 2016). It helps
company in getting strong financial position in case of large no. of debts. Company has it
branches spread all over the world with different varieties and diversity this provide the business
with strong position in market which help organisation in gaining the brand name and also create
a strong base for further expansion. Entity wide range of product and services that it provide to
its customer is also one of its strongest point it enhances the satisfaction of client and increase
the customer base of company leading to increase in productivity and sales it also helps in
overall development of institute.
Market position of Marriott hotel is one of its biggest strength, but there is also some
weakness that company needs to work on before any further or bigger investment. Company
management is need to be the strongest point of any organisation but for Marriott hotel its
turning into its biggest weakness because of there highly extended business there management
has start shaking it adversely affects the performance of entity which affects there customer
satisfaction before investing or expanding into any new business its necessary for organisation to
maintain there management and improve the overall performance of organisation (Lehr, 2015)
The another thing which can have major impact on the future plan of the cited firm that is there
state of high debt, this though help organisation in having strong financial position but changing
market can have negative impact on it which may affect the stability of business in market. Other
than this company also lack behind in term of technologies and field of information which can
help them but not using this may give there rival an edge.
Merging there business with other firms and business all over the world can be quiet
beneficial for the success of entity. Marriott have great opportunity of success in continent like
Europe. Though company has loyal customer to them but they can increase there customer base
as well as there satisfaction by enhancing there services and product and introducing new and
innovative idea in there services. Company have great opportunity of growth in market for this
they can use direct marketing plans like digital marketing advertisement etc.
Before investing in any new market company need to have proper research on the
condition and legislature and law of that place, as involving in political issue are the greatest
4

threat and risk to entity. Organisation also need proper planning and strategy before entering in
market as the high rate of fluctuation can have negative impact on the growth of business.
Strength
strong financial position
Strong position in market
Variety of services and products.
Weakness
High debt can be risk
weak management
Backwardness in IT department
Opportunity
Great scope of success in Europe
Enhance service lead to bigger customer base
Direct marketing
Threat
Legislature and law related to hotel
High Fluctuation
Background to Global Hotel and Tourism Industry
Hospitality sector and tourism industry both have coordinated working in current market in order
to gain better opportunities for sustainable values. It has been noticed that hospitality sector is
classified in different forms of businesses such as accommodations, food and beverage and other
additional services that enhances the experience of travellers (Garrigos-Simon and
Narangajavana, 2015). Although in order to have sustainable development the sector has
globally focused towards improving range of services for the guests. Banqueting, conference,
fitness clubs, sports, beauty spas, bars and sophisticated restaurant are key services that are
offering consistency to the industry.
It has been witnessed that increase in income level and standard of living has provided a
better opportunities to the leisure activities. It has directly impacted on the tourism activities as
well. Advancement in technological factors has also provided a support to the tourism industry
in terms of improving transportation facilities. In addition to this, it can be said that growth of
hotel industry is having a boost at worldwide level. Also, continuous development in terms of
productivity also helping the tourism sector to decrease the cost (Avilova, Ermakov. and
Gozalova, 2014). It creates a positive values and ensure that better accessible and affordable
services are being offered to customers in order to meet sustainability. The trend for Travel &
Tourism figures has been positive for the beginning of 2012 and has exceeded anticipations from
5

the start of the year. Global tourist arrivals have progressed to 4.9% in the year 2012 from
January to June, whereas airline passenger traffic is up 6.8%, and hotel occupancy rates are
growing in most markets.
Background Of emerging market
Tourism is one of the largest emerging market of today's world. Acc. to VisitBritain
Tourism contribute to £114.4 billion of worth in UK economy that is 8.2% of the countries GDP.
Its also recorded that in year 2009 country had more than 31.9 million of oversee visitors that
spend more than, £16.3 billion in the UK (Tuominen, 2014) It clearly shows what a great
opportunity it created for the business that want to invest in this sector but with opportunity there
are also many challenges that company has to face while entering this market.
PEST of Tourism market
PEST analyse help organisation in understanding the external factors that can have major
impact on the working of organisation. Having a pest analysis help comp[any in knowing the
risk which they may face and help them to come up with strategies to overcome the problems.
The pestle analysis of tourism Market is done below:
Political Factors: Political factor have direct impact on the hospitality and hotel industry.
Tourism flourish in those countries that are free from any type of turmoil. Environment feel of
terror and turmoil demolish the tourism market. Changing government regimes or terrorism all
affect the growth of tourism. Other than this every countries have their own legislature and laws.
They have different policies on tourism and taxation system. Before investing in this sector its
necessary to know all the rules and regulation that company have to follow. They also need to
pay attention to different fiscal incentives and government co-operation that can help
organisation to grow.
Economic factors: Different macroeconomic condition can have major impact on the hospitality
sector. Interest rate, currency, exchange rate, globalization, price, inflation all can have both
positive or negative impact on this sector. Global economy of country also effect the tourism of
that country. For e.g. recession in current time haver major impact on the economic condition the
consumer automatically cut there expense of travel expense and hospitality to compensate that.
Furthermore, economic condition have major impact purchasing power of travellers. So business
entity also need to pay special attention to this sector (Geetha, Singha and Sinha, 2017).
6

Social Sector: Like political and economic factor social factor also play important part, any
demographic change can have major impact on the growth of this organisation, other than this
lifestyle development and social concern also play major role in it, and can have deep impact.
The change in the preference of consumer and lifestyle have major impact. Nowadays people
prefer private accommodation. There also a rise of challenge in the name of Air BNB especially
for the hotels that are already established in this business and have earned a brand name, so this
factor is also as much as important and it cannot be neglected (vilova, Ermakov and Gozalova,
2014).
Technological Factor: This factor has come up as a facilitator to the demand of tourism
industry. Technology has bridging the gap between several parts of world through the help of
information transformation and communication. Tourism customer before travelling conduct the
basic research where they try to find the best deal that company has to offer. It necessary for
business entity to adapt to these technologies to survive in this competitive market.
Analysis of SWOT and PEST
SWOT analysis are done by organisation to identify the strength, weakness,
opportunities, and threats of a venture, business, project or for entity itself. Above there is
SWOT analysis of Marriott hotel this analysis has helped the entity to recognize there strength
and weakness that they need to strengthen and eliminate (Ryan, 2015). Through the amylase it
has come forward that companies the biggest strength lies in the market position and the brand
name that company has achieved. This strength help Marriott in creating strong base through
which they can enter in new market and establish there business there.
Some weakness that have come forward through this analysis are that because of big
expansion the management of entity has lost its management stability, there also some risk
regarding the high debt and financial issue market change can have both positive and negative
impact on entity. Moreover, it is also not up to date with today's technology that can be harmful.
(Okumus, 2013) Before venturing in new market its necessary for cited firm to come up with
different strategies through which they can eliminate there weaknesses for better and smoother
working of organisation
Other than this some opportunities and threat have also been discussed Marriott hotel
have great opportunity of success in European market and enhancement in services and product
7

can help entity in achieving higher revenue. Threats identify in this analysis can make or destroy
organisation any involvement in Government policy and laws can have negative impact on the
brand name of organisation
PEST analysis
This analysis help company to discern the external factor that have major impact on the
hospitality sector political stability has great impact on the tourism sector, for e.g. Bexit
terrorism are most recent event this event has great impact on the revenue and has noticeable
impact on hospitality and tourism, its necessary for cited firm to recognise this element before
investing in any new plane. Economic factor also have major impact for e.g. in current time
labour market has grown stronger and also the consumer spending of person has also risen which
is a positive sign for hospitality sector has more people will spend money on luxuries and
leisures (Nieves and Segarra-Ciprés, 2015). Social factor affect the global hospitality industry its
essential for entity to give special attention to them. Technology is enabler of tourism sector,
Hotels and airlines industry have adopted information technology to serve there customer better.
It necessary for Marriott hotel to adapt themselves to this technology especially when it has
become integral part of tourism this will give them competitive advantage and also help them in
serving there customer.
Strategies to be adopt and implemented while entering the market
Marriott hotel to come up with best marketing strategies can use different tool to come
up with different strategies.
Ansoffs matrix can be used to have proper framework that can help higher executive to
come up with a plan that can help them in there future investment. It has many strategies such as
product development, Market development, Market penetration and diversification (Lin, 2016)
The cited firm can use the product development method this emphasis on developing new
product to attract more customer. Marriott hotel can use this method and develop a product or
services which can make them more favourable in tourism sector.
8

Illustration 2 : Ansoffs matrix
(Source: Ansoff 's Matrix, 2017)
Porters generic strategies model: It can help Marriott in gaining the competitive
advantage this emphasis on three strategic basic i.e. cost leadership, differentiation, and focus.
Cost leadership can be most beneficial for cited firm there are only few hotels that provide
luxurious services at low price reducing the cost will not only increase there profitability it will
also increase there customer base as low cost will not only attract people of higher class but also
middle class
Justification of strategy
From the model used above Marriott hotel can use these two strategies to penetrate the
market of tourism. Product development can help entity to come up with more innovative and
creative ideas that can help them in gaining competitive advantage in new market (Lehr, 2015).
There are already many companies that had already invested in this sector this strategy will help
business to create new image among other, it will also enhance the sales of entity.
Reducing Cost can be very beneficial as we have stated before that it will attract the
customer of all economy from high class to middle class this will automatically increase the
9

sales of company (Tuominen, 2014). Furthermore, the traveller prefer low cost accommodation,
having luxurious services at lower price will attract more customer.
Practical application of strategy
There has been great change in the strategies of Marriott hotel the biggest change was in
there marketing strategy in early time advertising and digital marketing were not that famous but
with time company has ventured into this section which help company in gaining great visibility
and it also increases the market value of company.
5-10 Year prior the main goal of company was to find the stability in this ever changing
market while maintaining the brand name of company so there strategies were also like that. But
in current time company already has strong market position which so there focus has turned into
new sectors where it can expand its business
Financial base always have been issue for emerging entity, in starting years Marriott
work to form strong financial base that can help them in there future ventures. Looking at current
time it clears that Marriott have no issue regarding the finance of company so they can
implement strategies like cost leadership or cost focus.
CONCLUSION
The above study give detail study on the background of international market as well as
the background of cited firm. Project provide detail analysis of tourism market , it provides
detail on how beneficial it will be for cited firm to merge with tourism sector of society this will
not only provide company with broaden sector to work but will also increase the market sale and
customer base of organisation. This merge will also provide better opportunity and stability in
these dynamic market. Pest analysis is also done to recognise the possible opportunities and
threat company will face if it enters tourism market. Some suggestions and strategies are also
mentioned that hotel can adopt while entering the market and also provide justification of such
strategies.
10

REFERENCES
Books and Journals
Avilova, N. L., Ermakov, A. S. and Gozalova, M. R., 2014. An analysis of the international
customer attraction experience in the hospitality industry. World Applied Sciences
Journal, 30(MCTT)). pp.84-86.
Buhalis, D. and Crotts, J., 2013. Global alliances in tourism and hospitality management.
Routledge.
Garrigos-Simon, F. J. and Narangajavana, Y., 2015. The use of crowdsourcing as a strategic
model in future hotels. Tourism Today. (15). pp.105-120.
Geetha, M., Singha, P. and Sinha, S., 2017. Relationship between customer sentiment and online
customer ratings for hotels-An empirical analysis. Tourism Management. 61. pp.43-54.
J. Harrington and et. al., 2014. Strategic management research in hospitality and tourism: past,
present and future. International Journal of Contemporary Hospitality Management.
26(5). pp.778-808.
Lehr, D. D., 2015. An analysis of the changing competitive landscape in the hotel industry
regarding Airbnb.
Lin, X., 2016. Strategy Analysis of a Boutique and Lifestyle Hotel: A SWOT Analysis (Doctoral
dissertation, California State Polytechnic University, Pomona).
Mok, C., Sparks, B. and Kadampully, J., 2013. Service quality management in hospitality,
tourism, and leisure. Routledge.
Nieves, J. and Segarra-Ciprés, M., 2015. Management innovation in the hotel industry. Tourism
Management. 46. pp.51-58.
Okumus, F., 2013. Facilitating knowledge management through information technology in
hospitality organizations. Journal of Hospitality and Tourism Technology. 4(1). pp.64-
80.
Ryan, C., 2015. Trends in hospitality management research: a personal reflection. International
Journal of Contemporary Hospitality Management. 27(3). pp.340-361.
11

Tuominen, P., 2014. Designed for future: a qualitative analysis of management-intended brand
associations of a'new wave'hotel. In 32nd EuroCHRIE conference" Hospitality and
Tourism Futures", Dubai 6-9 October 2014. EuroCHRIE.
Online
Bernard Ross, 2017. Ansoff's Matrix. [Online]. Available
Through :<www.managementcentre.co.uk/ansoffs-matrix/>. [Accessed on 10th October 2017].
Marriott International. 2017. [Online]. Available
Through :<http://www.marriott.com/default.mi>. [Accessed on 10th October 2017].
12