What comes to your mind after hearing the name “Marriott”? Wait, let me guess. It must make you think about luxury five-star hotels with beautiful rooms and swimming pools.
However, what if I tell you that the top multinational company in the hotel industry, Marriott, didn’t start off by establishing hotels? Instead, it had a humble beginning. The company was known for owning a root beer stand in Washington, D.C.
Today’s article will be very interesting and informative as it will shed light on the operations of Marriott, one of the world’s biggest hotel chains. Moreover, in this article, we will also conduct Marriott SWOT Analysis to analyze the external and internal factors that affect the operations of Marriott.
However, before we proceed further with the SWOT analysis, let’s look at the history of Marriott.
The roots of Marriott can be traced back to 1927, when a young couple established a root beer stand in Washington D.C. Later, the couple added hot food items to the menu and named it “Hot Shoppes.”
In no time, the restaurant became famous due to its quality of food and good service, and within a year, two more Hot Shoppes were opened.
The Marriott couple didn’t only rely on their restaurants. They started diversifying their services by providing lunch boxes to flight passengers. By 1953, the company had grown enough that it was decided to make the company public.
Hot Shoppes, Inc. stocks were sold for $10.25 per share, and within two hours of trading, all shares were sold.
A few years after getting public, the company made a historic move to step into the hotel industry. The company opened its first hotel in Arlington, Virginia. For the next 25 years, Marriott seeped into the hospitality industry by opening several hotels.
Marriott didn’t just stop after owning several hotels in the U.S. It soon launched its first international hotel in Mexico. In the following years, Marriott became the first hospitality company to enter the cruise business.
As the years went by, Marriott expanded its operations internationally and domestically by opening hotels and similar properties. As a result, Marriott is now considered the largest hotel chain, owning more than 8000 properties in 139 countries.
Marriott is also responsible for providing jobs to 120,000 employees across the globe. With the help of these employees, it ensures the quality of its services. In 2021, Marriott managed to generate revenue of $13.8 billion.
Looking at the operations of Marriott, knowing it is the number one hotel chain across the globe, we decided to conduct its SWOT analysis. So before we start off with the SWOT analysis, it is essential to give you guys a bit of insight about the analysis so that you know what SWOT analysis is.
A SWOT analysis is essential to identify the internal and external factors that impact a company’s decisions and performance. A SWOT template lets business analysts look at companies’ strengths, weaknesses, opportunities, and threats in detail.
Now that you are aware of the function and significance of a SWOT analysis let’s proceed to carry out Marriot’s SWOT analysis.
Every company has strengths that enable it to compete in the market and create its own customer base. Companies that have more strengths compared to weaknesses succeed, while others fail.
Let’s identify some factors that are counted as the strength of Marriott.
All the companies have a dream to expand their operations globally. The reason why companies want that is because global presence causes an increase in revenue, and it minimizes the risk because reliance on one branch decreases.
The global operations of Marriott are considered its strength. Marriott operates across 139 countries and territories, which increases the scope of its reach. This allows it to increase revenues while spreading the risk. For example, if one region’s revenue declines, other regions’ revenue will support the company.
Being a market leader provides great strength and position to companies in the market. Companies fight for years to become market leaders since they enjoy maximum market share and hold a firm position in the market.
Marriott is hands down the market leader in the hotel industry. It has more than 30 brands and over 8000 properties worldwide. Being such a large-scale organization, the benefits of economies of scale are enjoyed by Marriott.
Having loyal customers is considered a massive strength for any brand since they are responsible for making a brand successful. Therefore, companies work day and night to ensure they are treating their customers right to have a loyal customer base.
Marriott is considered among the largest hotel chains in the world mainly because it keeps its customers happy with its customer-friendly policies. For example, Marriott provides opportunities to its customers to earn points which can be used to stay at the hotels for free.
The company works hard to improve its loyalty program to attract more people who want to stay at Marriott’s hotels. In addition, its efficient and effective customer service is essential in building a loyal customer base.
Besides having strengths, every company has some weaknesses. Weaknesses are the shortcomings that companies lack in achieving their goals. However, weaknesses are not permanent and can be transformed into strengths if the required effort is put in.
Let’s discuss some of the weaknesses that are stopping Marriott from moving forward.
Weak Data Protection
Great importance is given to data security in today’s world. However, data breaches can result in lawsuits and a bad reputation, affecting a business adversely.
Despite being the biggest company in the hotel industry, Marriott has a weak data protection system which serves as a drawback. In 2018, Marriott’s failure to protect its guest reservation database put the personal details of millions at risk.
This created mistrust among Marriotts customers, and many became reluctant to revisit hotels.
All the brands try hard to spread positive word of mouth regarding their brand. Different marketing strategies are made to build a positive narrative about the company. However, one incident can cause negative publicity for the brand, which can cause damage to the brand.
Marriott tries to take care of its customers in every way possible. However, it was subjected to such negative publicity in 2017 when Marriott failed to keep their promise of saving all the people from the hurricane.
During the hurricane, everyone saw that Marriott’s only mission was to save their customers, as they left their employees behind without any consideration. The fact that they did not even have enough staff to evacuate everyone is a mistake that resulted in negative publicity.
Strict Code of Conduct
A Code of conduct is a set of business practices that allow companies to remain ethical and successful. In addition, it enables the management to understand their business’s responsibility towards customers, employees, and other stakeholders.
However, a strict code of conduct can result in employee dissatisfaction and high labor turnover. Marriott is famous for having a strict code of conduct. Employees of Marriott have complained about its suffocating environment from time to time. In 2018, Marriott fired an employee for liking a tweet.
All businesses get opportunities to grow every now and then. However, not every company is good at grabbing the opportunities it gets. Although, a business needs to avail of the right opportunities at the right time to get big.
This section will discuss some of the opportunities for Marriott to grow.
As demographic changes take place over the years, businesses alter their business strategies to benefit themselves from the change. Making strategies according to the changes in population, preference, and other things can help businesses increase their revenue.
As more and more millennials and Gen-Z are entering the market. Marriott has the opportunity to grow its customer base by positioning itself as a cool youthful brand. Millennials are already bringing change to the hospitality industry, proving they will make brands like Marriott look outdated if they don’t adapt with time.
Expansion In Developing Economies
Over time, many economies have emerged as developing economies on the global map. The developing economies are always an ideal place to invest for businesses as they not only help increase the customer base but investing there can also reduce operating costs as they provide cheap labor.
Marriott already has a huge presence in developed countries. It should further look forward to investing in developing economies. This will increase the customer base of Marriott and enable the company to generate more revenue.
Diversification is essential for businesses. After a certain period, it becomes necessary for businesses to diversify their operations to increase their customer base and revenue.
Marriott has built its reputation of owning luxurious five-star hotels. However, it has the opportunity to adopt diversity by expanding its operations in similar industries. For example, Marriott can provide houses through Airbnb, or it can open affordable cafes for other segments of society.
No matter how big and well-stable a company is, it always faces threats from the external environment. Similarly, Marriott also faces different types of threats from its surrounding. This section will discuss some of the threats that Marriot faces.
After COVID-19, all businesses feel threatened by the pandemic. Businesses observed severe losses during COVID-19, which damaged the business severely. Many businesses somehow managed to save themselves from bankruptcy, but they can’t afford another pandemic in the future.
Marriott also faces the threat of another wave of COVID-19 as new variants infect people. Previously, Marriott observed a loss of $267 million in 2020. Currently, news of another wave of COVID-19 is threatening Marriott.
After the conflict between Russia and Ukraine transformed into a full-fledged war, many businesses ended their operations in Russia. By doing so, businesses lost many customers from Russia, and a loss of revenue was observed.
Similarly, after Russia invaded Ukraine, Marriott suspended all its operations in Russia. This caused a loss in Marriott’s revenue; still, the leading hotel chain decided not to operate in Russia. Five months have passed, and the war is still going on. Marriott is concerned about what will happen if the war doesn’t end soon.
All the industries that have more than one player undergo severe competition. Similarly, companies existing in the hospitality industry have to face significant competition.
Marriott is considered the market leader in the hospitality industry. Still, it has to fight off competitors like Hilton and Novotel to maintain its position in the industry. Over the years, the industry’s competition has increased and is further increasing day by day. As a result, Marriott is threatened that its competitors might snatch its market share and position in the future.
In today’s article, we first discussed the history of Marriott so that we know how it became the number one hotel chain over the years.
Then, we conducted Marriott’s SWOT analysis, in which we analyzed some of the strengths and weaknesses that Marriott possesses. Moreover, we also discussed the opportunities present for Marriott and the threats it faces from the external environment.
The findings of this SWOT analysis can also be displayed through a SWOT matrix or a SWOT table. This article not only provided insight about Marriott, but it also helped you guys to understand how to conduct a SWOT analysis. SWOT analysis is a handy tool that enables us to make strategies according to our company’s strengths, weaknesses, opportunities, and threats. Have a look at some of the examples of SWOT analysis to get a better understanding of how to apply it.