Environmental Analysis

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 by providing travelers
with elegant and classy accommodation needs. Marriot International was founded in 1927 by J
Willard and Alice Marriot and has since grown to become a global leader in accommodation
solutions (Marriott 2022). Marriot operates through its 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 December 31 2021, shows that Marriot
International has several revenue streams: 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 a $ 1.099 billion profit and delivered $3.36 earnings per share to its shareholders.
Approximately 120,000 full-time employees operate Marriot International as of December 31,
2021.

General environment evaluation

Mergent online classifies Marriott International’s activities as relating to the Hotels and
Motels Industry under the codes (ICB 40501025, SIC 7011, and NAICS 721110)
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
Political environment refers to the role of governments in shaping business (Ketchen &
Short, 2012). Marriot International has been significantly affected by political forces. The

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company registered revenues of US $ 20 billion in the year 2019. However, the global
pandemic forced governments in the World, including the US government, 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 traveling 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 its shares. 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 within
five 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 the 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.

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Technological
According to Ketchen and Short (2012), technological environment refers to the
improvement in product or service design that is provided by science. Marriott 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 the COVID-19 pandemic (Marriot, 2020). Specifically, Marriott purchased hospital-
grade disinfectant sprayers that use ultraviolet light technology and disinfecting liquid approved
and recommended by the Centers for Disease Control and Prevention (CDC) and the World
Health Organization (WHO).
In operations, Marriott edges out competition by focusing on its world-class system that
ensures continued customer value. Marriott’s system ensures fluid management of its travel
loyalty program, which 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 the 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 emissions. Marriott
International has launched a program dubbed Serve 360, which aims to provide a more
sustainable measure of doing business and serving communities (Serve 360, 2021). The
environment Marriott justifies the Serve 360 program as a necessary program for an
organization of Marriott’s size. Marriott has, within the program, developed sustainability goals

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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 by 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 chains 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 a
standardized industry code of conduct which enables it to avoid any 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, protection of 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 traveling
activity in those countries and their immediate neighbors (Tomczewska-Popowycz & Quirini-
Popławski,2021). This is essential given that Marriot has a presence in both Russia (Moscow)

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and Kyiv (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 traveling costs, power generation, and prices of goods. The surge
in oil prices and subsequent rise in prices of goods and services will generate uncertainty that
could affect traveling decisions and therefore affect Marriott’s business model (Lin & Bai
2021).
Social
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
The technological environment has also provided competition. Platforms such as Airbnb
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 time, been moving
towards providing unique customer experiences while at the same time providing the luxury
that Marriott prides itself in.
Environmental
In the business of the lodge, there has been a significant movement of many offerings
from lodges to eco-lodges. The prefix eco before the lodges demonstrates the lodge owner’s
commitment to 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.

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Legal
The development of the concept of corporate digital responsibility has greatly affected
the hospitality business (Jones & Comfort, 2021). Due to the nature of the information that is
collected for reservations, hotels and lodges are held in higher regard than other businesses.
Marriott has been in the spotlight with customer information safety concerns recently. The
increased threat and cyber risks mean that the risk for legal issues in this matter is higher in
Marriott’s case due to the size of their business and the amount of customer data they hold.
The effect of competition from technological offerings: Airbnb
Marriot receives stiff competition from flagship company Airbnb which has grown to
become a household name. Airbnb has a similar product offering to what Marriott offers.
Airbnb has disrupted the hospitality sector. The risk for Marriott is that Airbnb has grown
explosively over the past years since its inception. Through innovation and diversified
offerings, Airbnb has bright prospects moving into the future and could continue to disrupt
Marriott’s business model (Oe & Thuy, 2020). Airbnb has also incorporated sustainability
practices through Airbnb green. This can be viewed as a match to Marriott’s Serve 360, which
is also anchored on the principles of sustainability. The Airbnb green model has also seen a
significant shift in customer perception, and this has benefited Airbnb (Serano et al., 2020).
Key areas that could be affected by Airbnb include;
Market share
Since Airbnb has an almost similar but unique product offering, it could gain some of
Marriott’s customers and, in the process, wrestle away some of the market shares that Marriot
currently enjoys. Airbnb cannot be considered a new entrant, having been around for over ten
years. However, under Porter’s five forces for evaluating industry competition, Airbnb provides
a significant threat of substitutes (Ketchen & Short, 2012).
Revenues

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A subsequent consequence of loss of market share is the loss of revenues. Revenues are
directly connected with the changes in customer preferences and choices.
The vision, mission, and values statement

The vision statement provides the general direction that the organization would like to
follow. The mission represents the key activities that the organization engages in to achieve its
vision. The values are the principles that the organization stands by. Marriot International’s
vision statement is “to become the premier provider and facilitator of leisure vacation
experiences in the world.” This vision statement describes an organization that is committed to
providing global excellence and leadership in its business processes. Marriott International aims
to become the global go-to organization for all needs that relate to leisure vacation and travel.
Mission statement
Marriott International’s mission is “to enhance the lives of our customers by creating
and enabling unsurpassed vacation and leisure experiences.” The mission statement depicts an
organization that is committed to positively impacting the lives of its customers through its
product offering. The mission also shows Marriott’s commitment to being a leader among its
competitors. Marriott includes the characteristic of its product being unsurpassed. The mission
and vision statements are clear, simple, and easy to understand.
Core values
Marriot International is committed to putting people first (Marriott 2022). The
commitment to people-centered ideas makes Marriott one of the best organizations to work for.
Marriott creates an enabling environment for the staff to grow, succeed and contribute to the
organization’s efforts to meet its goals. The second core value is the pursuit of excellence
(Marriott, 2022). This shows the commitment that Marriott holds toward excellent customer
service. Marriott has received awards and accolades for its exemplary customer service, such as
World’s most admired companies by Fortune (Marriott news, 2022).

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The third core value is embracing change (Marriott, 2022). Marriot achieves service
excellence by innovating to challenge the status quo in the hospitality industry (Marriott, 2022).
The concept of embracing change has been central to achieving new brands, setting up new
locations, anticipating and responding to customer needs, and providing new experiences.
The fourth core value is acting with integrity (Marriott 2022). The organization is committed to
achieving its goals with strict adherence to ethical and legal standards. Key areas where
integrity is applied are employee relations, supply chain, sustainability, human rights, and social
responsibility. Marriott International is committed to serving the World in all dimensions. They
serve 360 models is aimed to nurture, sustain, empower, and welcome (Serve360, 2022).
Conclusion
The external analysis report depicts an organization that has to navigate many political,
economic, social, technological, environmental, and legal issues. The analysis shows that
Marriott is still vulnerable to the residual effects of COVID-19 due to its ability to affect
movement restrictions. Additionally, the analysis shows other key issues being, including the
Ukraine-Russia conflict affecting travel in the region and the surge in global oil prices.
Specifically, Marriot may suffer from the stiff competition offered by Airbnb, which has grown
to tremendous heights due to innovation and resilience in the wake of COVID-19. The risk
areas are the loss of market share and the resulting loss of revenue. The mission, vision, and
values statement show that Marriott is committed to providing global leadership in its area of
business, integrating integrity in business activities, sustainability, and social responsibility.

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