Marriott International: Business Model, SWOT Analysis, and Competitors 2023

In this blog article, we will delve into the business model, SWOT analysis, and key competitors of Marriott International, one of the world's leading hospitality companies. As of 2023, Marriott continues to dominate the industry with its extensive portfolio of hotel brands and a strong presence in both domestic and international markets. Through a comprehensive examination of its business model, we will uncover Marriott's strategies for growth and sustainability. Additionally, a SWOT analysis will shed light on the company's strengths, weaknesses, opportunities, and threats, while identifying its main competitors within the fiercely competitive hospitality sector.

What You Will Learn:

• Who owns Marriott International and why it is important to understand the ownership structure of a company.
• The mission statement of Marriott International and how it guides the company's goals and strategies.
• How Marriott International generates revenue and the key sources of income for the company.
• An explanation of the Marriott International Business Model Canvas and how it helps to visualize the company's value proposition, customer segments, and revenue streams.
• The major competitors of Marriott International and an analysis of their strengths, weaknesses, opportunities, and threats (SWOT Analysis).

Who owns Marriott International?

Marriott's Ownership Structure

Marriott International, one of the world's largest hotel chains, operates under a complex ownership structure. As a publicly traded company, Marriott is owned by a diverse range of shareholders, including individual investors, institutional investors, and mutual funds. However, the ownership of Marriott is not limited to these shareholders alone.

Founding Family: The Marriott Family

The Marriott family, led by J.W. Marriott Jr., is deeply connected to the company's ownership. J.W. Marriott Jr., the Executive Chairman, and his family have a significant ownership stake in Marriott International. Their involvement can be traced back to the company's inception in 1927 when J. Willard Marriott and his wife, Alice Marriott, opened a root beer stand in Washington, D.C.

Over the years, the Marriott family has maintained a strong presence within the company. They hold a substantial number of voting shares, allowing them to exercise significant influence over the company's strategic decisions and overall direction. While the exact percentage of their ownership is not publicly disclosed, their continued involvement demonstrates their commitment to the company's success.

Shareholders and Institutional Investors

Apart from the Marriott family, the company's ownership is distributed among a wide range of shareholders and institutional investors. As a publicly traded company, Marriott is listed on the NASDAQ stock exchange under the ticker symbol "MAR." This listing has allowed individuals and institutional investors to purchase shares in the company and become partial owners.

Institutional investors, such as pension funds, mutual funds, and asset management companies, play a crucial role in Marriott's ownership structure. These entities often hold significant ownership stakes, leveraging their expertise and resources to actively engage with Marriott's management and ensure the company's long-term growth.

Marriott's Franchisees

Another important aspect of Marriott's ownership is its franchise model. Marriott operates a significant number of its hotels under franchise agreements with independent owners and operators. These franchisees, who own and operate individual Marriott-branded hotels, contribute to the company's growth and success.

While franchisees do not own shares in Marriott International, they play a vital role in expanding the company's global presence. Marriott provides franchisees with its well-established brand, operational support, and marketing expertise in exchange for franchise fees and ongoing royalties. This mutually beneficial relationship allows Marriott to expand its footprint while providing business opportunities to independent hotel owners.

Conclusion

Marriott International's ownership structure is a complex blend of family control, institutional investors, and franchisees. The Marriott family's continued involvement and significant ownership stake demonstrate their commitment to the company's success. Alongside individual and institutional investors, franchisees play a crucial role in Marriott's growth and global expansion. This diverse ownership structure helps Marriott maintain its position as a global leader in the hospitality industry.

What is the mission statement of Marriott International?

Marriott International's Mission Statement

Marriott International, one of the world's leading hotel chains, has a clear and concise mission statement that guides its actions and decisions. The mission statement of Marriott International is:

"To enhance the lives of our customers by creating memorable experiences, delivering exceptional service, and providing quality accommodations."

This mission statement reflects Marriott's commitment to prioritize customer satisfaction and provide them with exceptional experiences during their stay. Marriott aims to go beyond simply offering comfortable accommodations; they strive to create lasting memories for their guests.

By emphasizing the importance of delivering exceptional service, Marriott recognizes the significance of customer service in the hospitality industry. They understand that excellent service can greatly impact a guest's experience and overall perception of the brand. Marriott's mission statement underscores their dedication to surpassing customer expectations and ensuring their satisfaction.

Furthermore, Marriott's mission statement also highlights the importance of providing quality accommodations. This aspect of their mission statement emphasizes Marriott's commitment to maintaining high standards in terms of the comfort and amenities offered in their hotels. Whether it be a luxurious resort or a budget-friendly hotel, Marriott aims to provide consistent quality across its diverse range of accommodations.

In summary, Marriott International's mission statement perfectly encapsulates their objectives as a global hotel company. It emphasizes their commitment to enhancing the lives of their customers through memorable experiences, exceptional service, and quality accommodations. This mission statement acts as a guiding principle for Marriott's actions and serves as a reminder of their dedication to creating an outstanding guest experience.

How does Marriott International make money?

Hotel Operations

The main source of revenue for Marriott International is its hotel operations. With a vast portfolio of brands, including Marriott Hotels, Sheraton, Westin, and Ritz-Carlton, among others, the company generates substantial income from room bookings, food and beverage services, and other hotel amenities. Marriott operates both owned and leased properties, as well as franchised hotels, allowing them to earn revenue through various business models.

Marriott's hotel operations encompass a wide range of offerings, catering to different market segments, from luxury to budget accommodations. This diversification allows the company to target a broader customer base and capture additional revenue streams. By constantly expanding its global footprint, Marriott International ensures a steady flow of income from hotel operations across various regions and markets.

Franchise and Licensing Fees

In addition to operating its own hotels, Marriott International also generates revenue through franchise and licensing agreements. This business model allows independent hotel owners to affiliate their properties with Marriott's renowned brands. In return, these owners pay franchise fees and ongoing royalties to Marriott.

Franchising allows Marriott to expand its presence rapidly without bearing the full cost of property ownership and operation. By leveraging the reputation and marketing power of Marriott's brands, franchisees benefit from increased customer recognition and access to Marriott's reservation system. In return, Marriott earns a portion of the revenue generated by these franchised hotels, enabling them to grow their income without significant capital investment.

Vacation Ownership and Timeshare Sales

Marriott International also operates a vacation ownership segment, which includes timeshare sales and related services. Through brands like Marriott Vacation Club, the company sells vacation ownership interests to individuals or families, granting them the right to use a specific property or properties for a designated period each year.

Timeshare sales provide Marriott with a steady stream of upfront revenue, as buyers typically pay a significant amount upfront for the ownership interest. Additionally, maintenance fees paid by timeshare owners contribute to recurring revenue. By offering flexible usage options and access to a network of vacation properties, Marriott can attract customers seeking memorable and convenient vacation experiences.

Other Revenue Streams

Apart from its core operations, Marriott International generates revenue from various other sources. The company operates a loyalty program, Marriott Bonvoy, which allows members to earn points for their stays and redeem them for free nights, travel experiences, and other rewards. This program not only fosters customer loyalty but also generates revenue through partnerships with airlines, credit card companies, and other businesses.

Marriott also earns income through its management and franchise services. By providing management expertise and support to third-party hotel owners, the company earns fees for overseeing the operations of these properties. Additionally, Marriott offers a range of consulting, training, and technology services to the hospitality industry, further diversifying its revenue streams.

In summary, Marriott International's primary revenue sources include hotel operations, franchise and licensing fees, vacation ownership and timeshare sales, as well as other ancillary businesses. Through its diversified business models and global presence, the company continues to generate substantial revenue and maintain its position as a leading hospitality brand.

Marriott International Business Model Canvas Explained

What is the Business Model Canvas?

The Business Model Canvas is a strategic management tool that provides a visual representation of a company's business model. It helps organizations to understand, analyze, and communicate how they create, deliver, and capture value. The canvas is divided into nine key building blocks that represent different aspects of a business, including customer segments, value propositions, channels, customer relationships, revenue streams, key activities, key resources, key partnerships, and cost structure.

Marriott International's Business Model Canvas

Marriott International is one of the world's leading hotel chains, operating a wide range of brands across various segments of the hospitality industry. Let's take a closer look at how Marriott's business model canvas explains the key elements of their business strategy.

Customer Segments

Marriott's customer segments are diverse and cater to different needs and preferences. They serve both individual travelers and group customers, including business travelers, tourists, and event planners. Marriott offers different brands and sub-brands to target various customer segments based on factors such as price, location, and amenities.

Value Propositions

Marriott's value propositions revolve around providing exceptional customer experiences, comfortable accommodations, and a wide range of amenities. They emphasize quality, reliability, and consistency across their brands. Marriott also offers loyalty programs, such as Marriott Bonvoy, to provide additional value and incentives for repeat customers.

Channels

Marriott utilizes various distribution channels to reach its customers. These include both direct channels, such as their official website and mobile app, as well as indirect channels like online travel agencies (OTAs), global distribution systems (GDS), and travel agents. Marriott also utilizes partnerships with airlines and other travel-related companies to expand their reach and attract more customers.

Customer Relationships

Marriott focuses on building long-term relationships with its customers. They aim to provide personalized experiences and excellent customer service throughout the entire guest journey, from the booking process to the stay and beyond. Marriott's loyalty programs play a crucial role in fostering customer relationships by offering exclusive benefits and rewards.

Revenue Streams

Marriott generates revenue through various sources. These include room bookings, food and beverage sales, meeting and event services, and ancillary services such as spa treatments and recreational activities. Additionally, Marriott earns revenue through franchising and management contracts with property owners, where they receive fees and royalties for providing brand support and operational expertise.

Key Activities

Marriott's key activities revolve around hotel management, brand development, and customer service. They focus on maintaining and enhancing the quality standards of their brands, managing hotel operations, and continuously improving customer experiences. Marriott also invests in research and development to stay ahead of industry trends and evolving customer preferences.

Key Resources

Marriott's key resources include their extensive portfolio of hotel properties, brand reputation, technological infrastructure, and human capital. They invest heavily in maintaining and upgrading their properties, ensuring that they meet the quality standards expected from the Marriott brand. Additionally, Marriott's employees play a crucial role in delivering exceptional customer service and creating memorable experiences.

Key Partnerships

Marriott forms key partnerships with various stakeholders to enhance its business model. These include property owners, franchisees, suppliers, and online travel agencies. Marriott collaborates with property owners through management and franchise agreements, allowing them to expand their brand presence without significant upfront investments. Partnership with suppliers ensures the availability of quality products and services, while collaborations with online travel agencies help Marriott reach a wider customer base.

Cost Structure

Marriott's cost structure includes expenses related to property operations, marketing and advertising, technology infrastructure, employee salaries, and loyalty program benefits. They aim to achieve economies of scale by leveraging their size and global presence to negotiate favorable terms with suppliers. Marriott also invests in marketing and advertising to promote its brands and attract customers.

In conclusion, Marriott International's business model canvas highlights how they create, deliver, and capture value in the hospitality industry. By understanding the key building blocks of their business model, Marriott can effectively strategize and adapt to changing market dynamics, ensuring continued success in the highly competitive hotel industry.

Which companies are the competitors of Marriott International?

Marriott International, one of the largest hotel chains in the world, faces fierce competition from several other major players in the hospitality industry. These companies not only rival Marriott in terms of size and global presence but also strive to provide top-notch services and experiences to their customers. Let's take a closer look at some of Marriott International's key competitors.

1. Hilton Worldwide Holdings Inc.

Hilton Worldwide Holdings Inc., commonly known as Hilton, is a global hospitality company that operates a vast portfolio of hotel brands. With over 6,500 properties across 119 countries, Hilton is a formidable competitor to Marriott International. The company offers a range of accommodation options, from luxury resorts to budget-friendly hotels, catering to various customer segments. Hilton's strong brand recognition, extensive loyalty program, and innovative guest experiences make it a prominent player in the industry.

2. InterContinental Hotels Group (IHG)

InterContinental Hotels Group (IHG) is another major competitor of Marriott International. With a diverse collection of hotel brands, including InterContinental, Holiday Inn, and Crowne Plaza, IHG operates over 5,900 hotels in nearly 100 countries. The company focuses on providing personalized, high-quality service to its guests and offers a wide range of amenities to meet different travel needs. IHG's extensive global presence and well-established loyalty program make it a tough competitor for Marriott.

3. AccorHotels

AccorHotels, a multinational hospitality company based in France, competes with Marriott International on a global scale. With a portfolio of over 5,000 hotels and resorts, including well-known brands like Sofitel, Novotel, and ibis, AccorHotels caters to a broad spectrum of travelers. The company emphasizes sustainability, innovation, and guest satisfaction, providing unique experiences across its various hotel segments. AccorHotels' strategic partnerships and acquisitions have contributed to its growth and intensified competition with Marriott.

4. Wyndham Hotels & Resorts

Wyndham Hotels & Resorts operates a vast network of hotels across various market segments, from economy to upscale. With approximately 9,000 hotels in more than 80 countries, Wyndham is a significant competitor for Marriott International. The company's brands, such as Ramada, Days Inn, and Wyndham Grand, offer diverse accommodation options to cater to different traveler preferences. Wyndham's strong brand recognition, extensive loyalty program, and global footprint position it as a formidable rival to Marriott.

5. Choice Hotels International

Choice Hotels International, with its portfolio of well-known brands like Comfort Inn, Quality Inn, and Econo Lodge, competes directly with Marriott International, particularly in the mid-scale and economy segments. The company operates over 7,100 hotels worldwide, providing affordable accommodation options for both leisure and business travelers. Choice Hotels' commitment to guest satisfaction, value, and innovation drives its competitiveness against Marriott and other industry leaders.

These are just a few of the notable competitors of Marriott International. While each company has its unique strengths and market positioning, they all strive to capture a significant share of the global hospitality market, constantly challenging Marriott to innovate and enhance its offerings to stay ahead in the competition.

Marriott International SWOT Analysis

Marriott International SWOT Analysis

Strengths

1. Global Presence: One of the key strengths of Marriott International is its extensive global presence. With over 7,600 properties across 133 countries and territories, Marriott has established a strong foothold in the global hospitality industry. This wide reach allows the company to cater to diverse customer preferences and tap into various market segments.

2. Brand Portfolio: Marriott International boasts a diverse brand portfolio, encompassing 30 different hotel brands. Ranging from luxury to mid-scale and budget accommodations, these brands cater to the needs of different travelers, giving Marriott a competitive advantage in attracting a wide range of customers.

3. Loyalty Program: The company's loyalty program, Marriott Bonvoy, is a significant strength. With over 147 million members, this program enhances customer loyalty and retention. Members enjoy exclusive benefits such as room upgrades, free Wi-Fi, and personalized offers, incentivizing them to choose Marriott over its competitors.

4. Strong Financial Performance: Marriott International has consistently demonstrated strong financial performance. In 2019, the company reported revenue of $20.97 billion, reflecting a 3.9% increase from the previous year. This financial stability allows Marriott to invest in expansion, maintain its properties, and continuously improve customer experiences.

Weaknesses

1. Dependence on Franchisees: While Marriott International operates some properties directly, a significant portion of its hotels are operated by franchisees. This dependence on franchisees can pose challenges in maintaining consistent quality standards across all properties. The company must closely monitor and support its franchisees to ensure brand consistency and customer satisfaction.

2. Vulnerability to Economic Conditions: Like any other hospitality company, Marriott International is vulnerable to economic fluctuations. Economic downturns can lead to reduced travel and discretionary spending, impacting the company's revenue. To mitigate this weakness, Marriott must diversify its revenue streams and focus on cost management strategies during challenging economic times.

Opportunities

1. Expansion in Emerging Markets: Marriott International has the opportunity to further expand its presence in emerging markets such as China, India, and Brazil. These markets offer immense growth potential due to increasing disposable incomes, urbanization, and rising tourism. By strategically targeting these markets, Marriott can tap into new customer segments and extend its global reach.

2. Technological Advancements: The advancement of technology presents numerous opportunities for Marriott International. The company can leverage technology to enhance guest experiences, streamline operations, and personalize services. Investing in innovative technologies such as mobile check-in/check-out, smart room features, and artificial intelligence can help Marriott stay ahead of its competitors and meet evolving customer expectations.

Threats

1. Intense Competition: The hospitality industry is highly competitive, with numerous global and local players vying for market share. Competitors such as Hilton, Accor, and Airbnb pose a threat to Marriott's market position. To maintain its competitive edge, Marriott must consistently innovate, differentiate its offerings, and deliver exceptional customer experiences.

2. Disruptions in Travel Patterns: Disruptions in travel patterns, such as political unrest, natural disasters, or health crises like the COVID-19 pandemic, can significantly impact the hospitality industry. Travel restrictions, reduced demand, and cancellations can lead to revenue declines for Marriott. The company must have robust contingency plans in place to mitigate the impact of such disruptions and adapt quickly to changing market conditions.

Overall, Marriott International's strengths lie in its global presence, diverse brand portfolio, strong loyalty program, and financial stability. However, it must address weaknesses related to franchisee management and economic vulnerabilities. By capitalizing on opportunities such as expanding in emerging markets and embracing technology, while managing threats from intense competition and travel disruptions, Marriott can continue to thrive in the dynamic hospitality industry.

Key Takeaways

• Marriott International is a publicly traded company, meaning it is owned by its shareholders who hold its stock.

• The mission statement of Marriott International is to "enrich the lives of our guests worldwide" by providing exceptional experiences and delivering superior customer service.

• Marriott International generates revenue through various sources, including hotel room bookings, food and beverage sales, and other services such as conference and event hosting.

• The Marriott International Business Model Canvas highlights key aspects of the company's operations, including customer segments, value proposition, key activities, and revenue streams.

• Competitors of Marriott International include other major hotel chains such as Hilton Worldwide Holdings, InterContinental Hotels Group, and Accor.

• In terms of SWOT analysis, Marriott International's strengths include its strong brand reputation, global presence, and diverse portfolio of hotel brands. Its weaknesses include vulnerability to economic downturns and intense competition. Opportunities for the company lie in expanding into emerging markets and investing in technology, while threats include geopolitical risks and disruptions in the travel industry.

Conclusion

In conclusion, Marriott International is a globally recognized hotel chain that has established itself as a leader in the hospitality industry. The company is owned by its shareholders, and its mission statement focuses on providing exceptional guest experiences through quality service and a commitment to excellence.

Marriott International generates revenue through various streams, including hotel room bookings, food and beverage services, and conference and event hosting. The company's business model canvas highlights key aspects such as customer segments, value propositions, channels, and revenue streams, all of which contribute to its success.

While Marriott International has positioned itself as a market leader, it faces fierce competition from other hotel chains such as Hilton Worldwide Holdings Inc., InterContinental Hotels Group PLC, and Accor SA. These companies constantly strive to attract customers through innovative services and unique offerings, challenging Marriott International's market share.

A SWOT analysis of Marriott International reveals its strengths in brand recognition, global presence, and customer loyalty. However, the company also faces weaknesses such as high dependence on the travel industry and potential vulnerability to economic downturns. Opportunities for growth lie in expanding into emerging markets and adopting new technologies, while threats include the rise of alternative accommodation options and intense competition.

Overall, Marriott International's success is built on its commitment to exceptional service, strong brand reputation, and strategic business practices. As the hospitality industry continues to evolve, Marriott International will need to adapt and innovate to maintain its competitive edge and continue providing outstanding experiences to its guests.

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