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How Marriott plans to beat Airbnb in winning over Chinese travelers

Nicole Sinclair
Markets Correspondent

Marriott (MAR), the world’s biggest hotel chain, has a new plan for fending off competition from home-sharing behemoth Airbnb. It involves a newly announced partnership with Chinese e-commerce giant Alibaba (BABA).

“What do people like about home sharing? …They like to have local, authentic experiences that really allow them to understand where they’re traveling,” said Marriott Global Chief Commercial Officer Stephanie Linnartz. “And that’s exactly what we’ll be doing for Chinese consumers through this joint venture for Alibaba.”

The joint venture will manage Marriott’s “storefront” on Fliggy, which is Alibaba’s travel service platform. It gives the hotel operator access to Alibaba’s 500 million mobile monthly active users, many of whom may be seeking the more intimate offerings you don’t usually expect from large hotels.

“It isn’t just about booking reservations,” she said. “But it’s about once you get the property how we can create this deep, rich experience by having Mandarin speakers at the hotel to help you plan your trip, to see local sites, to enjoy local restaurants and all the things that are involved in truly experiencing a city where you haven’t been before. That’s what consumers want and we’ll be able to do it in a way that’s very warm and welcoming for the Chinese consumer through this joint venture.”

Chinese tourists are expected to take an estimated 700 million trips over the next five years.

Marriott & Alibaba tap into the lucrative Chinese tourism business together.

Marriott, which outbid China’s Anbang group last year for Starwood Hotels, is looking to further enhance traffic to its 6,200 hotel properties with its online presence. The Alibaba partnership makes it more competitive against traditional peers as well as industry disruptors like the $31 billion giant Airbnb, which has made renewed efforts to capture travelers in China.

“[W]e are pairing our hospitality expertise with Alibaba’s digital travel platform, retail expertise and digital payment platform, Alipay, and driving membership to our loyalty programs,” according to Marriott CEO Arne Sorenson.

Alipay accounts for over half of China’s $5.5 trillion digital payment market, which is more than 50 times bigger than that of the US.

“We have rolled out Alipay at all of our China hotels and we’re in the process of rolling Alipay out globally, because we… want to make this a seamless, easy experience for the Chinese consumer both when they’re online digitally and of course through to the hotel experience,” she said.

“A big part of that is allowing the Chinese consumer to pay the way they want to pay.”

Nicole Sinclair is markets correspondent at Yahoo Finance

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