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DISTRIBUTION GENERAL MANAGERS MEETINGS – KEY TAKEAWAYS ©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 1
Scottsdale
DISTRIBUTION
GENERAL MANAGERS MEETINGS – KEY TAKEAWAYS
©2017MARRIOTTINTERNATIONAL,INC.PROPRIETARYANDCONFIDENTIAL. 1
MARRIOTT.COM
MOBILE
VOICE
SALES
MARRIOTT DIRECT
CHANNELS
TRADITIONAL AGENCIES, CONSORTIA, TMCs, GDS
CONSUMER CHANNELS
SPG.COM
DISTRIBUTION LANDSCAPE
WHOLESALERS
GROUP INTERMEDIARIES
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 2
DISTRIBUTIONDREW PINTO, SVP, Distribution
BARBARA PATTERSON
Sr. AdministrativeAssistant
ALEX PYHANVP, Distribution,
OTA, Meta + Wholesale
OTA + Meta +Wholesale leadership
Direct Channel BenefitsContract NegotiationsContinent Activation
ORAL MUIRVP, Distribution,
Transient, Group, GDS + Operations
TMC + TA + GDS Commercial Strategy
Group Distribution Strategy
Distribution Content, Operations
+ Connectivity
LEWIS DAWLEYVP, ERS Program
Design + Delivery of Future-State
Reservation Experience
System Integration + Transformation
ERIK KIEWIET DE JONGE
Sr. DirectorDistribution Strategy + Industry Solutions
Strategy EvolutionEmerging Trends
Industry Plays
LEADERSHIP TEAM
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 3
GLOBAL DISTRIBUTION CHANNEL MIX TRENDS
Digital channels continue to growBoth Direct and OTA
Intermediary cost pressures continueIntermediation levels continue to rise, though some successes in reducing transactional costs
Cost of sale has crept upwards since 2011, although we’ve made progress in the last two years
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 4
MARRIOTT DIRECT
CHANNELS
CHANNEL PORTFOLIO
NETWORK OF APPROVED
INTERMEDIARIES
STRONG, DIFFERENTIATED,
AND GROWING
Enable us to grow direct channelsHelp us acquire new customersLet us control when and where our product is soldImprove our profitability
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 5
GLOBAL DISTRIBUTION STRATEGY MOMENTUM
Member Rates are working – enrollment doubled, meaningful revenue and second stays from new customersOn-property enrollment (Second Stay program) succeeding –generating second stays through direct channelsGrowing Marriott Digital channels – and strong success with the PLUS programPricing premium wins for Group – earning price premiums for intermediated business with no conversion impact
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 6
DISTRIBUTION GOALSSHARED ACROSS THE COMPANY
Increase direct channel room nights at a faster rate than
current trends
Improve the profitability of
transient intermediary channels
METRIC:Increase direct
channel transient RN percentage
METRIC:Reduce transient
cost of sale
GROWDIRECT
SPENDWISELY
Continents:
US, Canada, CALA, Europe, MEA, APAC
Continents:
US, Canada, CALA, Europe, MEA, APAC
Enroll OTA guest arrivals in Marriott
Rewards
METRIC:Percentage of OTA
arrivals enrolled into MR
GROWOTA SECOND STAY
Continents:
APAC, MEA
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 7
DISTRIBUTION GOALSSHARED ACROSS THE COMPANY
Shift wholesale revenue from static to
dynamic
METRIC:Percentage of
wholesale revenue booked through
dynamic
SHIFT WHOLESALE
Continents:
Europe, MEA
Drive optimum group revenue through the effective use of GPO
METRIC:Percentage of GPO
usage for all opportunities
IMPLEMENTGROUP STRATEGY
Continents:
Europe
Improve the profitability of intermediated
group business
METRIC:Recover costs
through pricing premiums
IMPLEMENT GROUP STRATEGY
Continents:
US, Canada, CALA
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 8
HOW CAN YOU HELP?
Identify additional direct benefits
locally.
What will motivate your customers in your
region/market/city?
Use loyalty rates in marketing and promos.
You have the ability to go deeper
as a promotion.
Make sure loyalty rates are
loaded, prominent, and
not undercut.
WHAT CAN YOU DO?
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 10
GIVE CUSTOMERS MORE REASONS TO BOOK DIRECT
Consider OTA inventory yielding when:
you have excess demand/peak nights
and/or concern about mix.
If already enrolled, leverage it more.
Enroll in PLUS.
WHAT CAN YOU DO?
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 11
ACTIVATE ALL DIRECT-CHANNEL OPTIONS
Keep making progress!
Increase enrollment rates.Capture that info!
Expand to more intermediary customers
OTAsWholesalers
Travel agencies
WHAT CAN YOU DO?
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 12
ENROLL INTERMEDIARY CUSTOMERS
Commit to the wholesale strategyDon’t contract individually with designated Central Accounts(see MGS/The Platform)
Use standard contract template for everyone else (full yield-ability)Leverage wholesale portals for smaller wholesalersEnforce parity across all wholesale contracts
Monitor your rate-violation report closely
WHAT CAN YOU DO?
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 13
DON’T GET UNDERCUT
Follow channel standards (on MGS/The Platform)
If there is a new channel you wish to engage, contact usIt may be an opportunity to assess and negotiate centrally
Consortia guidance is in-process; coming mid-year
If you have any questions, contact the Distribution team
WHAT CAN YOU DO?
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 14
DON’T PARTNER WITH UNAPPROVED INTERMEDIARIES
Follow the standards: Pay no more than maximum commission on actualized room revenue, and never pay on F&B
Price with profit in mind: Commission and other costs to the hotel related to a group should be considered in pricing to offset costs and maximize hotel profitability
Be transparent with customers: Clarify to customers that intermediation is not “free” and they pay ultimately
Evaluate opportunities carefully: Use approved channels and make decisions based on the value of the business and the cost (Check MGS for latest Distribution POV on emerging channels)
WHAT CAN YOU DO?
©2017 MARRIOTT INTERNATIONAL, INC. PROPRIETARY AND CONFIDENTIAL. 15
IMPLEMENT GROUP STRATEGY
