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The hotel industry is highly cyclic, so you can’t predict when the downturn will happen. But even if it does, the chance of any brand’s survival is 50%. Due to the slump in business travel, it’s hard to be optimistic about hotels like Marriott and Hilton. And unless leisure travel picks up, this will continue.
Marriott International, the major franchising hotel company, has coupled up with various other brands like Le Meridien, Four Points, Sheraton, Westin, and more in their portfolio to appeal to all sections of their travelers. But even in this broad swath, Marriott hotel cannot attract a new age traveler looking to experience local culture and tastes and hence cannot gain any share in the BNB market.
This established hotel chain is also feeling the pressure of OTAs or online travel agencies. Sites like Expedia.com or Hotels.com are providing easy and varying options to travelers at heavy discounts and offers. They can strategically shift business away from traditional hotel chains to many new start-ups or small business owners who commit to sharing more profit.
Fransmart provides unbiased, data-driven insight for business owners looking for more information on a potential Marriot International Franchise opportunity. We assess businesses using financial points such as projected revenue growth and net profit margins, labor costs, rent, and region-specific customer satisfaction rates. We also consider operational factors such as region-specific customer satisfaction rates and overheads like rent and labor costs.
Marriott Hotels & Resorts Company Overview
Established in 1927 by J. Willard and Alice Marriott, the Marriott group of hotels operates under the family leadership. As the industry leader, the largest lodging company has 30 brands under its umbrella in 131 countries. They boast of serving 7000 locations, nearly half of which are franchises.
The hotels’ brand ranges from luxury hotels to upscale brands to mid-tier and extended stay brands. More recently, Marriott has added many speciality lifestyle brands for young travelers, primarily located in the busiest center of their cities.
Franchise Cost And Initial Investment:
The luxury hotel business is the most expensive of a franchise business. A Marriott hotel franchise investment can range anywhere between $67 Million to $105 Million. It does not include the cost of real estate, which depends on the location and arrangement of the rooms.
MARRIOT INTERNATIONAL portfolio has 30 brands to offer a franchise owner. When planning to invest in a Marriott franchise, you first need to determine which one suits your investment capacity. Here’s a list of the Marriott International brands by tier and class:
Luxury Brands
- Regis Hotels & Resorts
- The Ritz-Carlton
- JW Marriott
- Edition
- The Luxury Collection
- W Hotels
- Bulgari Hotels & Resorts
Upper Upscale Brands
- Marriott
- Delta Hotels by Marriott
- Sheraton
- Marriott Executive Apartments
- Autograph Collection Hotels
- Le Meridien
- Tribute Portfolio
- Westin Hotels & Resorts
- Renaissance Hotels
- Gaylord Hotels
Upscale Brands
- Courtyard by Marriott
- Four Points by Sheraton
- Springhill Suites by Marriott
- Residence Inn by Marriott
- AC Hotels by Marriott
- Aloft Hotels
- Element by Westin
Upper Midscale Brands
- Protea Hotels by Marriott
- Fairfield by Marriott
- Towneplace Suites by Marriott
- Moxy Hotels
All of these brands target different demographics, price ranges. They also have exclusive brand promise and development roadmaps. As a potential investor, you must evaluate all the available brands and choose one that best fits you.
Marriott Franchise Owners Have A Lot To Worry About
#1 Bonvoy- Their loyalty program does not work up to the mark:
Marriott’s Bonvoy loyalty program has a whopping 125 million members. That’s a lot of potentials to let down. The program has many hiccups when it comes to providing the promised benefits for customers. Let’s take free nights as an example. Not delivering on this promise will cause high customer dissatisfaction, bounce rates, and general frustration, which is not appealing to new franchise owners.
#2 Employee Dissatisfaction:
There have been so many instances of disappointment from Marriott employees. The disgruntled workers have cited wrongful termination as one of their problems. They have also been vocal about not being given the benefits and pay that they were promised and stalled negotiations for higher salaries. Bad management and an inability to retain its workforce make the Marriott brand unfit for the best people.
#3 Declining Customer Service Quality In Franchise Locations:
Marriott has been aggressively adding hotel franchises every year since 2017. There’s just one problem: many of these franchises don’t meet the standards of company-owned locations and have performed worse than the company-operated sites. A bad experience in one franchisee floods other businesses with negative press, which can cause a brand to lose out on traffic across the board.
#4 Poor Customer Services And Long Hold Times:
Marriott, the global leader in hospitality, was known for its award-winning customer service. However, this reputation has been threatened with recent reports of long hold times on phone lines, inaccurate information, or no response at all. Emails go unanswered, and posts don’t get responses.
#5 Not Able To Manage It Problems:
Marriott has been facing major IT issues in recent years. Customer service has suffered in the form of wrong bookings, interface problems, and more. It has fatally demotivated potential investors in its franchise opportunities, who could see this as a sign of Marriott’s failing brand.
#6 Incorrect Pricing Offered To Customers:
The company has had several problems lately, and this is probably the worst. They can’t seem to get prices and deals right for the customer. Multiple instances of lower rates increasing at the time of stay have led to customer frustration with the brand.
In Short
Marriott International’s unhappy franchisees face many challenges in their day-to-day operational duties, from customer service issues to IT problems, inaccurate pricing, and managing its loyalty programs and employees. The investment into a Marriott franchise is not as lucrative as it might look on the surface.
The hotel industry essentially functions to make travel comfortable for the people. With such instances coming out in the light, the Marriot International franchise opportunity sees a big challenge for its future.
Sources:
https://www.franchisehelp.com/franchises/marriott-hotels–resorts/
https://www.nytimes.com/2019/08/26/business/hotels-marriott-hilton-hyatt.html
https://thepointsguy.com/guide/top-marriott-complaints-to-resolve-2019/
https://www.ukessays.com/assignments/marriott-international-leadership-style-and-problems-2021.php