SWOT analysis of Marriott International
This is a detailed SWOT analysis of Marriott International. Marriott International was founded in the U.S in 1927. It is the largest hotel company in the world since its acquisition of Starwood in 2016. In 2017, the hotel had 6,500 properties across 30 brands in 127 countries and territories. As of the end of 2017, Marriott operated 25 brands in hotel sector under the Marriott umbrella. Most of the brands have been purchased over the years to build up the hotel’s impressive portfolio (Marriott International, 2018).
Strengths of Marriott International
After acquiring Starwood Hotels and Resorts Worldwide in 2016, Marriott became the world’s largest hotel company with nearly 1.27 million rooms. It owns a number of big brands, some of which many customers do not know who they belong to. For example, Bulgari Hotel in Milan, Bali, and London; Gaylord hotels in the USA; and a multitude of budget brands Marriott have bought over the years.
Growth through innovation
Ritz-Carlton Yacht Collection will accommodate 300 passengers/Guests as from 2020 with each guest paying $5,600 per person. Partnership with Alibaba to book hotel reservations without a deposit, and enjoy a wallet-free experience is also impressive. The Alibaba membership includes 500 million members potentially. Using Airbnb concept, the London-based Tribute Portfolio Homes consists of 200 apartments charging customers from $200 to $1,000 per night.
Marriott International has the strongest loyalty programs in the hospitality sector worldwide with 110 million members.
Weaknesses of Marriott International
After hurricane Irma had struck the Caribbean island of St. Thomas, Marriott sent its cruise ship/yacht to rescue people, but rescued only its own hotel guests leaving others behind, although they had loads of space.
Marriott was ordered to pay a civil penalty after a lawsuit in which the hotel blocked the personal Wi-Fi of guests at one of their conference centres and agreed to pay a $600,000 civil penalty.
Opportunities for Marriott International
New geographical markets
Global hospitality sector is growing rapidly. While Marriott has a very good presence, further growth is possible in a number of countries in the world. Exploring new geographical markets is also worth the effort.
Increase in global travel
The number of people travelling for both work and pleasure is on constant rise. Marriott can avail of this opportunity by using its existing properties and building strategic alliances with other hotel chains and airlines.
Threats to Marriott International
The biggest threat at the moment is the on-going family feud involving John Marriott III who claims that his father Bill Marriott and his uncle Richard Marriott have unlawfully cut him out of the family’s $3 billion trust.
According to the CEO of Marriott, the Trump policy on immigration and tariffs is a big threat for hospitality sector in general and Marriott in particular. 83 million visitors were expected to visit the US by 2020 and everyone had been preparing. Trump policies are not helping.
There are tensions and legal issues with china as Marriott went head-to-head in competition with a Chinese firm for the acquisition of Starwood. The Chinese wanted it as well and lost, delaying the merger acceptance afterwards (Connor, 2018). Some analysts believe that Marriott will have to sell one of its brands soon due to the merger with Starwood, and that the company has become too big in size (Eisen, 2017)
From the research done for the purpose of this SWOT analysis of Marriott International, it can be asserted that Marriott has become the biggest hotel chain in the world and is not giving up this position so easily. Marriott’s performance is better than its rivals in terms of profitability and net profit margins.
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Last update: 10 August 2018
Connor, N (2018) “China shuts down Marriott website for a week after hotel chain listed Tibet and Hong Kong as countries” https://www.telegraph.co.uk/news/2018/01/12/china-shuts-marriott-website-week-hotel-chain-listed-tibet-hong/ [Accessed on: 04.07.2018]
Eisen, D (2017) “Six months after, hotel industry can’t stop talking about Marriott/Starwood merger” https://www.hotelmanagement.net/development/six-months-after-hotel-industry-can-t-stop-talking-about-marriott-starwood-merger [Accessed on: 04.07.2018]
Marriott International (2018) Marriott International Marks 2017 as Year of Historic International Expansion, available at: http://news.marriott.com/2018/01/marriott-international-marks-2017-year-historic-international-expansion/ (Accessed on 08.08.2018)
Photo credit: Forbes.com
Author: Veeren Gowrea
Veeren Gowrea is a lecturer in Tourism & Hospitality management. He holds an MBA in Strategic Management and MSc in Human Resource Management from the University of Wales, UK. He also holds a Postgraduate Certificate in Higher Education (PgceHE) from Birkbeck, the University of London. He works as a visiting lecturer at a number of institutes in London.