Marriot International

Marriot international is an organization that operates in the hotel industry. It runs franchises for
lodges, hotels and residences and provides customer value through providing elegant and classy
accommodation needs for travelers. Marriot International was founded in 1927 by J Willard and
Alice Marriot and has since grown to become a global leader in accommodation solutions.
Marriot operates through its own chain of hotels and franchises with renowned names in the
hotel industry such as Best Western, Worldwide Hotels, Sheraton and more. Currently, Marriot
International operates more than 7000 properties in 131 countries globally. Marriott
International’s shares trade in the United States stock market under the stock code MAR.
Financial information for the year ended 31 st December 2021 shows that Marriot International
has several revenues streams such as base management fees, franchise fees, rent and lease
revenues, and cost reimbursement revenues. The last reported filings show that Marriot made $
13 billion. This was an improvement from 2020 revenues of $ 10571. Marriott International
made $ 1.099 billion profit and delivered to its shareholders a $3.36 earnings per share. Marriot
International is operated by approximately 120,000 fulltime employees as at 31 st December
2021.
PESTEL Analysis
PESTEL analysis is the careful evaluation of an organization’s external environment. It
includes the political, economic environment, social, technological, environmental and legal.
Political
Marriot International has been significantly affected by political environmental forces. The
company registered revenues of US $ 20 billion in year 2019. However, the global pandemic
forced governments in the world including the US governments to enforce movement
restrictions in a bid to contain the spread of the virus. The restriction of movement meant that
tour and travel, a key area where Marriott is a beneficiary and key player was affected. The
revenues dipped to $ 10 billion in 2020. Subsequent development of a vaccine has led to the

easement of measures by the government and normal travelling has resumed. This has been
reflected in Marriott International’s earnings which increased to $ 13 billion.
Economic
The economic segment represents the economic conditions that Marriott operates within
(Ketchen & Short 2012).
The US dollar has continued to perform resiliently against other currencies. This has helped to
preserve Marriott’s dollar valued assets. Additionally, Marriott is a revenue and capital-
intensive business through receiving bookings from clients, payments of management fees and
payments made to suppliers; therefore, dollar operations were not affected by currency
devaluations.
Marriott’s ability to generate capital from the stock market has been boosted by the competitive
nature of Marriott’s shares. As at the time of writing this report, the share had closed trading at
US$ 171.52. This was a significant improvement from the lowest share price recorded in within
5 years which was $59.08 in April of 2020.

Social
The ability of people to engage in social activities has influenced Marriott’s business model
(Ketchen & Short 2012). The social factors include the demographics such as population size,
and customer attitudes. People’s attitudes towards uptake of the COVID-19 vaccines are an
important social factor to consider. This is because since the onset of the pandemic, travel
requirements have been updated to include, in most cases, a recent negative COVID-19 test and
proof of vaccination (Pavli & Maltezou 2021). Considering Marriott’s business model, the more
people accept and take the vaccines, the more they are likely to fulfill travel requirements and
the more likely to provide business for Marriott International. The COVID-19 pandemic also
seems to cause more severe illness to the aged population. This may influence their travel
preferences. They may travel less often or reduce the risks of contracting the virus (Beck &
Heshner 2021).

Technological
(Ketchen & Short 2012) define the technological environment as the improvement in product or
service design that are provided by science. Marrott International relies on technology to fulfill
its product offerings to its customers. Marriott’s business model allows customers to book to
reserve their stay, cancel and reschedule their stay.
Marriott International uses technology to ensure food and client safety. This was a response
mechanism that the organization implemented in to demonstrate commitment to customer
safety in the wake of COVID-19 pandemic (Marriot 2020). Specifically, Marriott purchased
hospital grade disinfectant sprayers that use ultraviolet light technology and disinfecting liquid
approved and recommended by Centers for Disease Control and Prevention (CDC) and the
World Health Organization (WHO).
In operations, Marriott edges out competition by focusing on their world class system that
ensures continued customer value. Marriott’s system ensures fluid management of its travel
loyalty program that has more than 160 million members, making it the largest in the world.
Marriot’s reservation management system incorporates data from global associates and
franchises and ensures full functionality of booking related activities. The system allows
Marriott International to centrally process all reservations resulting in a low cost per
transaction.

Environmental
The environmental segment represents the physical conditions within which the organization
operates (Ketchen & Short 2012).
Many global organizations are operating with strict adherence to environmental sustainability
standards. In the hospitality industry, environmental issues arise due to challenges in handling
waste and carbon emission. Marriott International has launched a program dubbed Serve 360

which aims to provide a more sustainable measure of doing business and serve communities
(Serve 360, 2021). The environment that Marriot justifies the Serve 360 program as a necessary
program for an organization of Marriott’s size. Marriott has within the program developed
sustainability goals set for achievement by 2025 (Serve 360, 2021). The program takes a
multifaceted approach aimed at nurturing community and natural resources and operational
sustainability to reduce environmental impact. Members of Marriot’s loyalty program have an
opportunity to be part of the program through donating some of their loyalty points (Serve 360,
2021).

Legal environment
The legal environment relates to how the courts influence Marriott’s operations (Ketchen &
Short 2012). The legal environment is important to Marriott’s operations given that the
organization operates many licenses and franchises. The legal perspective also becomes a
necessary consideration due to the amount of customer information that Marriot holds. For
example, in 2018 Marriot was fined 18.4M pounds for a data breach where customer
information from one of the chain of hotels owned by Marriot was accessed. Some of the
information accessed included names, email addresses, passport numbers, and arrival and
departure itinerary. Cyber security in hotel and lodge reservations is a major concern that
Marriot has for the most part been able to successfully maneuver. Besides this issue, Marriott
has developed an industry standardized code of conduct which enables it avoid many legal
risks. Some of the issues that cause legal risks and inhibit Marriott’s competitiveness are unfair
competition, financial records and methods, disclosures to the government, bribery and political
contributions, protecting confidential information, workplace practices including diversity and
workplace harassment (Marriot n.d). All these issues have been covered in Marriott’s code of
conduct.

Key trends in each environmental segment

Political
The ongoing tension from the Ukraine-Russia conflict may cause reduced travelling activity in
those countries and their immediate neighbors (Tomczewska-Popowycz & Quirini-Popławski
,2021). This is essential given that Marriot has presence in both Russia (Moscow) and Kiev
(Ukraine) and their neighboring countries such as Norway, Finland, China, Sweden and Poland.
Economic
The global economy has been affected by several factors such as the COVID-19 pandemic and
the Russia-Ukraine conflict which has affected oil prices. With a surge in oil prices there has
been a significant rise in prices of commodities and services that affect Marriott’s operations
such as travelling costs, power generation and prices of goods. The surge in oil prices and
subsequent rise in prices of goods and services is will generate uncertainty that could affect
travelling decisions and therefore affect Marriott’s business model (Lin & Bai 2021).
Social

Technological
The technological environment has also provided competition. Platforms such as Airbnb which
have an almost similar product offering to what is offered by Marriot International (Yang &
Mao 2020). The trajectory of the Airbnb platform is that it has over the time been moving
towards providing unique customer experiences while at the same time providing luxury that
Marriott prides itself in.

Environmental
In the lodges business, there has been significant movement of many offerings from lodges to
eco-lodges. The prefix eco before the lodges demonstrates the lodge owner’s commitment

towards environmental sustainability. Eco-lodges are considered pristine and have arguably
higher demand (Rawashde & Al-Ababneh 2021). The ability of Marriott to provide similar
offerings could affect its competitive nature.
Legal
The development of the concept of corporate digital responsibility has greatly affected the
hospitality business (Jones & Comfort 2021). Due to the nature of information that is collected
for reservations, hotels and lodges are held in higher regard than other businesses. Marriott has
been on the spotlight with customer information safety concerns recently. The increased
cyberthreat and cyber risks means that the risk for legal issues in this matter is higher in
Marriott’s case due to the size of their business and amount of customer data they hold.

References
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travel and activities in Australia – The early days under restrictions. Transport Policy,
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ATHENS JOURNAL OF TOURISM, 8(1), 9–18. https://doi.org/10.30958/ajt.8-1-1
Lin, B., & Bai, R. (2021). Oil prices and economic policy uncertainty: Evidence from global,
oil importers, and exporters’ perspective. Research in International Business and
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Marriot International. (n.d.). Marriott Business Conduct Guide. Marriott.Com.
https://www.marriott.com/Multimedia/PDF/CorporateResponsibility/Marriott_Business_Condu
ct_Guide_English.pdf
Marriott International Launches Global Cleanliness Council to Promote Even Higher
Standards of Cleanliness in the Age of COVID-19. (2020, April 21). Marriott
International Newscenter (US). https://news.marriott.com/news/2020/04/21/marriott-
international-launches-global-cleanliness-council-to-promote-even-higher-standards-of-
cleanliness-in-the-age-of-covid-19
Pavli, A., & Maltezou, H. C. (2021). COVID-19 vaccine passport for safe resumption of travel.
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Serve 360 (Marriot). (2021). 2021 Serve 360 Report. Serve360.Com.
http://serve360.marriott.com/wp-content/uploads/2021/09/2021_Serve_360_Report.pdf
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Collapse of Tourism in Ukraine? Sustainability, 13(8), 4126.
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