Marriott was ramping up investments in technology to provide a seamless experience to consumers, engaging them much before their actual stay at the hotel, said Ramesh Daryanani, VP Global Sales for Marriott International in the Asia Pacific. He noted that the newly rolled out loyalty program ‘Bonvoy’ was aimed at redeeming points for an experience, going beyond the usual hotel offering of redeeming points for a stay. He expressed enormous faith in going local and noted that the business, across the Asian continent, was being largely driven by the local populace. He was recently in the capital for a select one-on-one with the media. Here are some excerpts from the interaction:
How is the supply side looking like? Industry insiders believe that there is a bottleneck, as far as supply is concerned.
I used to run sales and marketing four years ago when I was based out of Mumbai. At that point in time, when I left India, we had 27 hotels. As we speak today, we have 116 hotels in India and we are opening 12 more hotels this year, probably a few more. In South Asia, we have a total of 123 hotels. So, in terms of the scale of growth, I think we are the number one in the inventory size.
Yes, maybe, there is a bit more cautiousness as far as sealing deals are concerned. But to say that deals are not happening is not true.
So, is the demand outpacing supply?
There is demand coming through to India. When we look at our business, we had a record last year. Our RevPar results are in double-digits. Our occupancies were at a record high. Our market share premium (which is where we differentiate ourselves from the competition) – what premium do we charge at our hotels –results were at an all-time high. So, for me, yes there are some markets that are on the verge of saturation, but we need to look at what hotel companies are doing to drive greater market share. We have seen that share come through, in our case.
If you ask me that is there is enough supply in Delhi? My answer is no. A city like Las Vegas has some 1,20,000-odd rooms and more coming in. Look at what has happened in Aerocity. We were the first hotel to get in there. Try and find space in Aerocity now. It is tough. The place has developed, and the demand has come through. I think the piece is that landmark hotels which used to be the destination for travellers are finding their going more challenging. People want to stay closer to their workplace and travel as less as possible. You will increasingly find sub-markets within a market. It is happening in Bengaluru, Mumbai, Delhi, and the rest. The demand is being driven locally. Over 70 per cent of our guest is local. It used to be the other way around a few years ago.
That has been the big change in the landscape, is not it?
A big change, indeed. That has changed the way we operate our hotels and F & B. Our philosophy has been to go local and give the best of the local flavour to our customers. Whether it is India or China, an overwhelming number of guests are local and that is first what you are catering to.
Where is this growth coming from? In terms of the market segmentation, how much of it is being driven by tier-2 and 3 cities? Can you pin-point some specific regions or destinations that are catalysing this growth?
We will see the Northeast open up a whole lot more. We have had limited distribution in that region. We have, now, just opened the first Courtyard in Siliguri. It has ramped up really well. We will see Guwahati and Shillong and our second hotel in Nepal come in. So, we are seeing a lot more deals come through in secondary and tertiary markets. We are going to get a Sheraton Grand in Indore. It will be our second hotel. It is an upcoming MICE destination. It was never on the map before. People are now more inquisitive about newer destinations and that is a new trend.
Let us talk about the distribution and challenges therein. There is a growing concurrence on the need for looking beyond rates and incorporating the larger experience in driving online sales. Given Marriott’s standing and leadership position, how are you addressing the issue?
The start of that is by combining our loyalty program. We have launched ‘Marriott Bonvoy’ on the 13th of February. ‘Bonvoy’ means more than good travel and it is going from being a hotel program to a travel program. It might sound insignificant but is a very important distinction between the two. We are going beyond consumers just redeeming their loyalty points for stays. We are looking at consumers redeeming their points for experiences. A traveller would not want to haggle over a couple of dollars but reflect on what is he going to get when he chooses to stay at a particular hotel and how it enriches and benefits him.
Loyalty program apart, the second aspect is that of technology. It is talked about by everyone, so how does one differentiate? We are engaging the consumer even before he gets to the hotel. Consumers can, real-time, ask for their preferences. For instance, ordering a meal when you get to the airport so that your meal is ready when you get to your room. All of it will be enabled through technology and that is where the investment is. Price won’t be a factor if the experience is seamless.
Marriott has got every base covered, is not it?
Well, almost. That is the beauty of Marriott with 30 brands in its ambit. We are getting into the home-sharing business. We launched a pilot last year in Europe, with 200 homes. It went really well. You will see that part of the business expanding as well.
It should be a great relief for consumers because the absence of standardization has been the bane for the segment.
Standardization, security, the usage of your loyalty points, all the things that you come to love about Marriott is available in the home-sharing experience. So, it is a win-win proposition for our customer.