This is a research based assignment on the international expansion opportunities and practices of Marriot Hotels. Marriot International, Inc., which is based in the U.S., is a global operator of a broad collection of hotels and other hospitality facilities.
The company has about 3,150 lodging and accommodation facilities located in USA and many others in foreign countries. With a wide variety of self-branded properties across the world and exclusive lodging brands, Marriot is arguably ranked among the top leaders of hospitality services in the world.
Guests’ accommodation requirements are increasing abundantly with every new day, due to the changing environment brought by globalization, among other drivers. The increasing demands for exclusive lodging and accommodation facilities facilitated by globalizations have continued to call for much concern from the hospitality sector.
This indeed is one of the many economical opportunities and benefits that have been brought by the trend of globalization to the vast hospitality industry. Along with the increasing lodging demands, the trend has also brought great impact to other driving forces in the hospitality industry, in a manner that touches almost every sector of the industry (Rusa, van Knippenberg & Dan 13)
These impacts have continued to affect positively, all operations in the sector, in a way that increases demand for hospitality products and services, thus forcing many companies in the industry to take their business across national boundaries.
Among those companies that have been able to adopt to the many changes in the sector, and who have been optimistic enough to see opportunity in every bit of new developments, are the Marriot International, Inc., who have successfully opened hospitality chains in almost all parts of the world.
One of the company’s major goal and objective is to carry on with its mission of providing exclusive programs and resources that do reflect the global communities. This indeed explains the company’s current global diversity and inclusion to almost every part of the world, especially in the developing countries.
As it would be observed, there are many challenges in the current hospitality industry, but Marriot’s optimistic approach would enable to them see opportunity in those challenges and utilize them fully, as one way of ensuring that they remain ahead in the competitive market place.
The following graph indicates Marriot’s shares in the market, compared with other companies in the hospitality sector.
Ever since the company’s foundation by Willard Marriot way back in the year 1927, it has been through rapid developments over the time. Today, the company is proud of about 3,200 lodging properties globally, with a total of 435 hotel facilities outside USA.
Despite the many challenges currently permeating the global hospitality industry, Marriot are yet to feel the heat, due to their enduring management philosophy and focused leadership abilities. Marriot International has successfully managed to carry its hospitality brands into many regions of the world.
This trend continues even today, as the company directs its expansion plans to other developing regions, where they are yet to make an entrance (Ulrich 81). However, despite these international expansion efforts which reflects success and strength in the global market, Marriot Hotels have never been lucky to elude some of the many business challenges affecting the hospitality sector today.
As it is observed, financial, economical and cultural challenges are some of the major global challenges which continue to affect the company’s expansion efforts.
Cultural Challenges
The cultural differences presented by various cultural groups have been a major challenge to the company. Different countries have different cultural perceptions, and sometimes, these varied cultures may not offer a smooth welcome to many hospitality projects aligned to Marriot’s global diversity and inclusion plan.
Some people in those diverse regions may tend to see the company’s policies, standards, brands, services, and offers as a threat to their own culture. For these reasons, these communities may not be ready to compromise their own way of life in favor of a foreign investor, just because they have a global reputation in the hospitality sector.
For instance, the company’s recent non-smoking policy inside their lodging facilities, even though ethical, may not work well in most places where smoking is fully accepted. However, as it would be observed from past studies, Marriot Hotels have always devised new strategies to address the issue of culture, which proves to be common in many foreign countries.
One effective way of addressing cultural challenges and issues has been through the spirit of diversity, which ensures that the company’s huge workforce is drawn from various regions representing a diversity of culture. The company’s mixed-up workforce really reflects the rich diversity of the communities in the entire world, where the company has a touch.
Economical Challenges
No one in this world, not even the smartest financial analysts can foretell the predicament that awaits the global business sector in the near future. This is due to the ongoing implications of the past financial crises and turbulences.
Many companies in the world have never been stable with their businesses, owing to the many challenges posed by the uncertain patterns of the economy. Businesses all over the world are gradually regaining stamina in the market, as the global economy continues to stabilize from the impact of the recent financial crisis, but with a lot of challenges (Boyd 42).
However, some companies in the global market such as Marriot International who have had a strong financial stability have never been serious victims of these financial turbulences and have sailed all through with their operations in the hospitality sector, even at the peak of the worst economical times ever. This however does not mean that Marriot International has never felt the pinch of current global economical challenges.
Whenever global economical turbulences do occur, they affect every sector of our economy, either directly or directly. In this case, one way by which Marriot continues to pay the cost of economical challenges is through its international expansion efforts.
While it is not easy to establish new properties in some countries in the current economical situations, it has never been easy for the company to manage its property and facilities in some regions where the implications of the 2007 global crisis are yet to subside completely.
In that case, the company has no other choice, but to apply useful management concepts which are certain to enable them survive the many challenges regularly presented by the uncertain economical patterns of the day. One of the most applicable concepts used by Marriot to deal with this challenge is the adjustment of prices to match the economical changes.
The following chart shows the average price of a room per year for the company in different economical times.
Financial Challenges
Financial challenge remains a major obstacle in the expansion of the hospitality sector. Marriot International, even though a big player in the sector, has never been excluded from this challenge. Customers’ needs are becoming complex with every moment that passes, driven by the current information age (Palierse 17).
In this regard, customers are armed with more information regarding exclusive services and products that they would expect in a company having a global recognition, such as Marriot. To respond to these demands, Marriot has regularly been forced to part with a lot of money to maintain its exclusive hospitality brands and property, as one way of retaining their reputation in the industry.
However, trying to align the company’s vast operations with its global reputation has always been a costly intervention which has continued to freeze the company of a lot of money, in every financial year. This poses great challenges to the company’s recent expansion efforts to other pending regions.
It is also clear that the financial performance of the company’s properties is not the same in all regions. While the economies of some individual nations continue to play a larger role in the company’s financial success, things are not so pretty in other regions.
This has the meaning that, Marriot has spent more money in the management of its properties in some regions, while the value of these investments is never promising sometimes. Another serious and common financial challenge facing the company in its expansion efforts is the issue of business environment in other parts.
In some fast developing regions such as India, land is very expensive and this makes it hard for the company to establish new property there, owing to the serious management and operational challenges this is likely to pose to the business in the future.
Works Cited
Boyd, David. “Lessons from turnaround leaders.” Strategy & Leadership 39. 3 (2011): 36-43. Print.
Palierse, Christophe. “L’américain Marriott veut implanter un hôtel Bulgari à Paris.” Les Echos 31. 12 (2011): 17. Print.
Rusa, Diana., van Knippenberg, Dan., & Wisse, Barbara. “Leader power and self- serving behavior: the moderating role of accountability.” Leadership Quarterly 23. 1 (2012): 13. Print.
Ulrich, Dave. “Organizational capability: creating competitive advantage.” The Executive 5. 1 (2001): 77-92. Print.