Marriott CEO Says Some Covid Cuts Permanent, Emphasizes Hotel Owners Vs. Guests

Jeff Bezos says the biggest mistake businesses make is not focusing most on what customers want.

If Marriott can’t deliver the most value to guests, those guests have options – more so than with airlines or car rentals in many markets. They don’t just compete against Hyatt and Hilton but also Airbnb.

However Marriott’s CEO – who says workers make too much money and guests need to have more sympathy for hotel ownership groups – says Marriott needs to balance “the expectations of our guests..and the financial realities that our owners and franchisees face.”

This means “hotels might have a different way of doing business going forward.” Brand standards will be enforced “sometime next year.” But they’ll be modified to “consider franchisee feedback and..focus on reducing costs” with moves like “elimination of daily housekeeping at certain properties.”

Brand standards around everything from food and beverage concepts to housekeeping were relaxed during the pandemic to allow owners to focus more on sheer financial survival. But Marriott leaders plan to return to these standards and making sure owners and franchisees are abiding by them by sometime next year.

Oberg and Capuano reiterated during the call that the reintroduction of brand standards will consider franchisee feedback and a focus on reducing costs. This could mean further emphasis on contactless features like mobile check-in and check-out, which reduces staffing needs at a front desk, and elimination of daily housekeeping at certain properties.

“You can expect us to continue to try to strike the right balance between the expectations of our guests as they get back on the road and the financial realities that our owners and franchisees face,” Capuano said. “Whether it’s housekeeping protocols, whether it’s food and beverage service, we’ll continue to evaluate service levels by market and quality tier around the world.”

Viewing franchisees as the customer, rather than guests, is at the heart of a problem at Marriott that began under the late Arne Sorenson. If you want to understand the mess Bonvoy is in,

  • The program was intended to lower owner costs
  • The basic offered benefits are richer than Hilton or IHG, from late check-out to suite upgrades
  • The problem is that benefits aren’t consistently offered at the hotel level
  • And the program isn’t proactive enough about enforcing consistent delivery of benefits (that would require financial penalties for owners)
  • And they aren’t investing in customer service that properly understands program rules and proactively helps guests, instead customer service usually gives wrong answers where disputes with properties are concerned (this reflects management’s predisposition and better customer service means higher costs)

Somehow management is in a bubble where they hear mostly from their true customers, hotel owners. Guests are the product they sell to owners.

But they are undercutting their business, stuck in mid-2020 when hotels lacked guests and revenue was scarce, rather than focusing on a future where there is significant business to compete for.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Why I canceled my Marriott card and moved my business to Hilton. Good riddance to the m

  2. Dear Marriott – I have stayed within your brands 95% of all my stays in last 7-8 years. I understand Covid, and I understand business. Your profitability as a company is surprisingly high during tough times. Your prices for rooms / property amenities, esp at Ritz, JW and higher-end brands are still as high, or higher as pre-covid times. Now, the rub for me is all the conversations I’ve had with bartenders, servers and front of the house talking about lack of support from the Company and the challenge (that most all cos have) of fewer people. Why am I still paying as much for less service and staff that is not happy?

  3. So disappointing. The Marriott brand has always delivered for us. During COVID it has been sooo disappointing. Employees/owners are using COVID as an excuse to deliver far less service and quality. One too of the BonVoy issues this seems like a horrible move for the brand that has always had a strong connection to it’s mission and values. New CEO, this is a disaster in the making! Change it back quickly are you will see people leave in droves #marriott from a titanium platinum member

  4. Yes, property owners and investors are the true customers of corporations like Marriott. But it has always been this way..
    What has changed is tincreased focus on short term financial performance driven by CEO equity compensation plans. CEOs believe present vue of short term profits exceed long term losses due to customer switching. Or they will have made their fortunes before long term losses materialize.

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