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Skift Global Forum Preview: Marriott’s Loyalty Program Key to Competing With Airbnb and All-Inclusive Players

Danni Santana, Skift
Skift Global Forum Preview: Marriott’s Loyalty Program Key to Competing With Airbnb and All-Inclusive Players

Marriott International has had a very busy 2019. After completing a challenging integration of its Starwood Hotels & Resorts acquisition made three years ago, the hotel chain has launched a new home rental business, (Homes & Villas by Marriott International) to compete with the likes of Airbnb, and committed itself to bringing more all-inclusive hotels to guests in Latin America and the Caribbean.

Marriott has been quick to point out both offerings are intended to make its loyalty program, Marriott Bonvoy, stickier for guests. Already at 133 million members, Bonvoy users have taken a liking to both Marriott’s new portfolio additions and former Starwood branded hotels now available to them around the world, said Chief Financial Officer Leeny Oberg.

Like other large hotel chains, Marriott’s loyalty program is very much the lifeblood of the company. Direct bookings in the second quarter on the Marriott Bonvoy app jumped 70 percent for the chain, fueled by adoption in the lucrative Asia-Pacific region, Marriott said In August.

This comes at a time when hotel brands have been working diligently to entice travelers to book rooms directly instead of through online travel agencies. The expectation for Marriott is that its growing loyalty program will make each new component of its business a successful one.

Marriott Chief Financial Officer Leeny Oberg will be speaking at Skift Global Forum in New York City on September 19.

Skift Editor’s Note: This interview has been edited for clarity and length.

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Skift: With Starwood Hotels now integrated into Marriott Bonvoy, how much interest are you seeing from Marriott members in staying at your Starwood properties? 

Leeny Oberg: Both Marriott and Starwood properties are performing well and benefitting from our stronger loyalty program.  Marriott Bonvoy’s member occupancy penetration is up 160 basis points (1.6 percent) year‐to‐date, which we attribute to the strength of our loyalty program and the breadth and depth of the portfolio we offer. We have been pleased to see many legacy Marriott Rewards customers staying in legacy SPG-branded hotels and vice-versa. We’re quite optimistic about the future.

Leeny Oberg, chief financial officer of Marriott International. Photo: Marriott International

Skift: Marriott has also announced new home rental and all-inclusive businesses this year. How large of an impact do you expect Marriott Bonvoy bookings will have on these two new segments?

Oberg: We know from our 2018 home rental program pilot that Marriott Bonvoy members value having this product offering in our portfolio. We believe our highly‐curated home rental product – Homes & Villas by Marriott International – and the recent launch of our all-inclusive platform, fully integrated into our loyalty program for earning and redeeming points increases the value of our loyalty program. Home rentals and all-inclusive resorts give loyalty members even more options for travel experiences with Marriott, allow us to leverage our strong brands and expertise in an evolving competitive landscape, and ultimately drive a greater share of wallet for our portfolio.

Skift: Which of the aforementioned two do you project will have a larger impact on Marriott’s financial results sooner?

Oberg: Well, let’s start by recognizing how recently we have entered these two segments. In August, we announced that we now have 2,500 rental properties, which is quite small compared to others in the space. Our all-inclusive platform just launched, and we have signed management contracts with developers who plan to build five new resorts expected to open between 2022 and 2025.

Come see Marriott CFO Leeny Oberg speak at Skift Global Forum Sept. 19 in NYC. Get Tickets Now

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