Marriott International President and CEO Arne Sorenson, in Chicago on Wednesday to address the Executives’ Club of Chicago on corporate social responsibility, sat down with HOTELS Editor in Chief Jeff Weinstein to discuss topics ranging from what further Marriott is learning from its recent data breach, the initial success of its Bonvoy loyalty program launch and what he thinks about, among other things, Airbnb extending itself further into the hotel space after acquiring HotelTonight.
Sorenson’s talk with the club addressed CSR as a continuous goal. From training employees to recognize signs of human trafficking and providing personal alert devices for housekeepers and other employees to increase safety, to eliminating plastic straws at its properties worldwide, he highlighted steps the company is taking to broaden its commitment to CSR.
HOTELS: Can you offer an update on the impact of last fall’s data breach?
Arne Sorenson: We’ve continued to be transparent with our customers, and I’ve testified in the Senate and other things have happened since. But by and large, I think we’re getting to the point where we will in all likelihood settle into a process where the government folks in the legal process will take whatever time it needs to fully resolve this thing.
H: Can Marriott take a leadership role within hospitality to do something on an industrywide basis?
AS: We do have an industry council that focuses on cybersecurity efforts and, of course, we are sharing with that council what we’ve discovered.
H: Do you think it’s worthwhile to have an industrywide initiative?
AS: It’s certainly worthwhile for us to be transparent with each other and make sure that we are learning from each other and figuring out the right tools that can be used. Whether there’s an industry wide initiative or not – I don’t know. We’ll have to see.
H: Can you share any early measurements from the launch of the new loyalty program, Bonvoy?
AS: I think it’s going great. You have a new name, which by and large people like. The campaign is great. It’s great fun. You have a few folks, of course, who say, ‘I don’t like the name.’ But I think overwhelmingly people have responded well to the name.
You’ve got the combined loyalty program, which is probably more important so that no longer do users have to measure SPG points or Marriott points and transfer one from the other. And I think that’s a big advantage. We did go through late last year and into this year a lot of changes in the systems that the hotels use and sometimes that will impact the guest and the experience, and we’re working through those. But we’re making pretty good progress. So we feel really optimistic.
H: You’ve been able to measure any kind of ROI from the launch?
AS: We have some early measures, which are encouraging, but it would be too soon to really talk about those.
H: Loyalty is evolving to become more than just points for rooms. Where is Marriott going?
AS: If you measure contribution to systemwide sales, we have an extraordinarily dynamic and strong program and that gives us some license to do some more things in this space. But I think the value associated with this program is very important. ‘Why is it in my interest to be a member of that program?’ I think we’ve got an extraordinary amount to offer.
HOTELS: What is your take on Oyo, which is aggregating mostly budget hotels, predominantly in India and China, and doing so at such a rapid rate with already more than 500,000 rooms?
AS: I don’t know that I have one that’s worth much to tell you the truth. I’ve met the founder of Oyo in India a couple of years ago and he seems like an impressive young man. It is not directly in our space as they’ve started in a value place in the market. They are a digital first company, which I think is interesting and it will be interesting to watch them evolve. And, of course, now you’ve got Airbnb now making its investment in Oyo. Airbnb is also a digital first company and also has a value focus. So it will be interesting to see whether they just build on each other’s strengths in that space or whether they try to do something that’s a little different.
H: So you have Airbnb moving into adjacent business with its buy of HotelTonight and now investing in Oyo, and you have Accor testing several adjacent business models. How important is it for a company like Marriott to spread its wings behind its core business?
AS: The short answer is, I don’t know. What’s important to us is to make our loyalty program broadly appealing and regularly relevant to travelers. Certainly for the folks who are on the road all the time it already is that. Well over half of our business is coming to us from loyalty members. So you see the way this thing resonates already. But for the less regular travelers, if there are some adjacencies, maybe it’s in home sharing, maybe it’s in something else that make that program relevant to them more frequently, we think that can drive further opportunities.
H: How is Marriott’s dabbling in adjacent spaces going?
AS: Quite good. Stay tuned.
H: How has your point of view evolved on Airbnb?
AS: It’s a great company; it’s a big platform. It’s obviously continued to grow. But I think the first and second waves, and it’s still the bulk of their business, is in a value-first part of the business. We’re not in that budget segment of the hotel business; it’s a different business focus…
Now, there are obviously going to continue to try to grow. They are going to try to use their technology platform and try to figure out if it is through Oyo or HotelTonight, or though other things they are doing. Interestingly, both of those have a value or bargain flavor to them, so maybe they are sort of consistent with those roots from Airbnb. But we’re not going to underestimate them. They will be of a presence in the hospitality space and we will have to pay attention to them.