A year after Marriott International CEO and President Arne Sorenson oversaw the company’s acquisition of Starwood Hotels and Resorts to become the largest hotel chain in the world, the company is dealing with new challenges: merging the two loyalty programs, adjusting to policy changes, and competing with OTAs.
During Skift’s Global Forum in New York City on Sept. 27, he shared his thoughts on a few hot-button issues.
Relations with Cuba
Marriott currently operates a Four Points hotel in Havana, with two other properties in development and “about a handful of others we're talking about.”
However, progress remains uncertain after the Trump administration reversed Obama-era policies to ease sanctions with the island nation.
Sorenson said the company needs prior authorization from the government to enter these agreements. Additionally, the three current agreements with the Cuban government will need to be renewed in two years.
“We are hopeful that what this administration will say, at minimum, is whoever has permission to be there will be grandfathered in,” he said.
Sorenson believes going forward and engaging with Cuba is the strongest approach, not only from a business perspective but “to accomplish change there for Cubans, and create a stronger relationship between us by being engaged. It would be an absolute folly to go back to the position we had before.”
Merging loyalty programs
When Marriott first acquired Starwood, the projected timeline for combining the two loyalty programs was about a year. Now at the anniversary of the mega-merger, Sorenson said they are at least another year away from an integrated program.
“It’s not as simple as we want it to be…It takes lots of dollars and lots of time to meld the two,” Sorenson said.
The initial merging of the Starwood Preferred Guest program and Marriott Rewards – allowing members to link accounts, match elite status and change miles between the programs – was an essential step, Sorenson said, to retain the loyalty of both its Starwood and Marriott customers.
Sorenson also said the extended time frame is ensuring it is done correctly and will be properly tested before being rolled out.
Competing with OTAs
The loyalty program is also the company’s principal tool in competing with Expedia and Priceline.
“We know who we can market to, who we can service and deliver real value to," Sorenson added. "They know without having to do careful calculation that it’s in their interest to be part of our program and to book with us.”
The number of brands offered by the company – a whopping 30 – is also a huge advantage, giving Marriott customers a broad choice.
Speaking out on social issues
Sorenson has been outspoken about certain decisions the Trump administration has made, but he said that can be difficult and polarizing.
“When you get to questions about inclusiveness in our society, the LGBT community, and travel policy, these things are fundamentally important to our community of associates. I speak out about those issues for them.
“Most important are the 750,000 people who wear our name badge every day,” Sorenson said. “They want to know what the changes in our world mean for us. And what this company stands for.”
He also spoke about a divisive decision that made headlines recently, in regards to hosting a national convention organized by ACT for America, identified by the Southern Poverty Law Center as an anti-Muslim hate group, at its Marriott Crystal Gateway hotel in Arlington, Va.
Sorenson defended his decision, saying that while he might not agree on a personal level, companies like Marriott and others should remain neutral. He added that having the meeting at one of Marriott’s hotels in no way equates to support or judgments towards their viewpoints.
“What’s practical? What’s legal?” Sorenson asked. “Do we really want, as a society, for companies like Marriott and peers in our industry and others to make judgments or points of view on people sitting in our meeting rooms? I shudder to think that we really expect that my role or Marriott’s role is to say one person's views are not acceptable in our hotels and another person’s views are.”