Marriott International (MAR) is looking to capitalize on travel trends to cash in on younger travelers and keep its business model protected from major disruptions from Airbnb.
Shares of the Bethesda-based hotel chain were trading higher on Monday, as its shareholder return plan and securities analyst presentation have encouraged optimism.
Billions of Bookings
One of the key trends that Marriott is looking to cash in on is the larger population of travelers booking vacations around the world, particularly among experience-hungry millennials.
"Gen X and millennials are embracing experiences over things," a mid-day presentation from Global Chief Commercial Officer Stephanie Linnartz stated.
The company forecast about 2 billion international travelers seeking places to stay by 2030.
The trend is pivotal in sustaining the company's aggressive expansion strategy that slates hundreds of thousands of rooms to open in the coming years.
In particular, the expansion in China and the Asia Pacific region is key, given Chinese outbound trips are slated to nearly triple to 160 million by 2020 as younger generations step outside of the mainland for vacations.
Clashing With Increased CompetitionTo be sure, Linnartz's presentation notes that there is increased competition for the booming travel market and customers are now looking for more personalized experiences aided by technology and services.
CEO Arne Sorenson has noted in the past that this is not only from Airbnb, but also from tech giants in Silicon Valley.
"I think less about Airbnb than I do about [Alphabet] (GOOGL) and Facebook (FB) and all these other digital empires who own all of us," Sorenson said in mid-2018. "We are in an absolute war for who owns the customer... We have disruptors that are without a doubt trying to take ownership of our customers."
As a result, while the company has an Airbnb competitor pilot called Hostmaker, the focus from the securities analyst meeting on Monday homed in more firmly on technological innovation in rewards programs and applications.
Chief Global Officer Ray Bennett explained that the company has added new apps that track airport shuttles, offer mobile dining purchases a la GrubHub (GRUB) , and a mobile kiosk to service customer needs or requests at all hours in pursuit of these more demanding tech-forward consumers.
He added that the company has partnered with tech companies like Netflix (NFLX) in order to make stays more comfortable and appealing to younger customers with elevated expectations.
The bespoke experience is only enhanced by the company's Bonvoy rewards programs, which have sustained a growth of about 1.5 million users per month despite initial complaints from former Starwood Preferred Guest (SPG) members.
The continued use of the company's apps is also encouraging in the wake of major hacks that leaked the personal information of hundreds of millions of guests and the passport information of at least 5 million customers.
Sorenson blamed the Starwood system that the company inherited in its merger for the breach during a Senate hearing on March 7, after which the company retired the database of records acquired from the subsidiary.
Judging by the over 125 million members now part of the loyalty program, the company seems to have restored confidence in its programs.
The second half of the investor presentation has recently kicked off and will cover much of the economics and financial aspects of the company's three year vision.
To tune in as it continues, click here.
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