Marriott executives hint at cost cuts that will almost certainly impact future hotel stays

At a time when major hotel companies such as Marriott And Hilton growing by luring existing hotel owners into new brand affiliations, executives of these brands must do what they can to seal the deal.

On Monday morning, Marriott’s executive team said it was about to launch a major cost-cutting initiative to attract hoteliers and perhaps a tie-up with Marriott International, the world’s largest hotel company. world, is even more attractive. Overall cost reductions could reach $90 million across the organization.

The conversation about the brand’s earnings report may have led some to suggest that the savings and efficiency initiative may be aimed at Marriott at the corporate level. If you think it doesn’t affect you, guess again.

“We’re looking at efficiencies and savings that we think will clearly benefit owners,” Marriott CEO Anthony Capuano said during an earnings call on Thursday. Two. “We are looking at every aspect of our engagement with them and we hope to have some tangible savings opportunities identified for them in the very near future.”

While Capuano and Leeny Oberg, Marriott’s chief financial officer and executive vice president of development, declined to provide many specifics while they hosted the investor call, it’s easy to assume the company The company will continue to explore ways to do more with less. at the asset level.

Much of the industry has moved away from full-service restaurants or even staffed breakfast bars at select hotels in favor of lobby grab-and-go markets. It’s reasonable to think that further adjustments to food and beverage offerings may be on the way as hotel restaurants often operate at a financial loss.

There may also be smaller adjustments around required brand standards. Marriott’s leadership team a few years ago even hinted Alarm clock on the living room nightstand might not be as useful nowadays since so many people carry their own smartphones.

While we await details of Marriott’s management’s official cost cuts, one can’t help but think that this could also help Marriott attract owners at a time when competitors Their competition is struggling with similar conversations.

Hyatt’s leadership team noted late last month that they had lost some hotels to competitors because the owner felt it was too costly to maintain brand standards. Meanwhile, Hilton’s new Spark brand is growing rapidly as hoteliers find it easier and more affordable to switch to that brand’s requirements rather than just staying within their existing brand network.

But speaking of Spark, Marriott plans to introduce it The Mexico-based City Express brand was acquired last year entering the US is a sign that the hotel giant increasingly sees an opportunity to increase its presence in the affordable hotel sector.

“Our progress in the mid-range segment around the world has been outstanding and we look forward to meaningfully growing our presence in this high-growth market segment,” said Capuano. .

Bonvoy Construction

We are humble at TPG so we will not say we are the ones behind this. But it’s interesting to see after a few quarters “Is Hilton Honors about to surpass Marriott Bonvoy?”– strange headlines, Marriott execs spent a lot of time on an investor call to remind everyone how and why Marriott Bonvoy Program bigger.

The loyalty network currently has 219 million members – higher than Hilton Honors. Just reached 200 million members. Marriott leaders often refer to Bonvoy as a program that offers a variety of experiences as well as redemptions for reward nights at your favorite hotels.

Capuano specifically called out Bonvoy’s sweepstakes promotion, where members can bid for points on Taylor Swift concert tickets, and even a new linked partnership with Starbucks, where you can earn Bonvoy points for your daily latte purchases.

Furthermore, there are newer ways to earn and redeem points, like Marriott’s partnership with vacation rental platform Sonder and with MGM International Resort.

Expect more of these creative tie-ups and brand partnerships in the future.

“Marriott Bonvoy has never been stronger and we look forward to further expanding our presence worldwide,” said Capuano.

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