Trade Talk: Rajeev Menon of Marriott International

A Q&A with the hospitality giant’s Singapore-based President for Asia Pacific (excluding Greater China) on post-Covid trends, strategies for driving loyalty, and regional growth.

All photos courtesy of Marriott International

Outside of Greater China, which countries are seeing the strongest recovery when it comes to bookings and occupancy rates at Marriott hotels?

Recovery has varied across the world, to be honest, and a lot depends on governments that are still restricting movement of people. What we saw at least with Asia ex-China was that we were one of the first regions to go into the pandemic and we were actually the last to get out of it, because most countries had kept their borders shut, and even restricting movement domestically to some extent.

Having said that, now that many countries have opened international borders, what we are seeing is any country that has a large domestic base of travelers is recovering at a phenomenally strong pace. In countries like India and Australia, recovery is now crossing 2019 levels. Southeast Asia, which has been more reliant on international travel, is also seeing considerable pent-up demand for travel – business is coming back in Singapore, and things are definitely on the up in a big way. But is it back to 2019 levels as yet? No. I think it will be towards the fourth quarter of this year in some of these markets, particularly Indonesia. And then when I look at Northeast Asia, which is Japan and Korea for us, Korea is recovering at a much faster pace. Japan on the other hand still continues to restrict entry, so as a result you see that the demand pickup in Japan is much slower in comparison.

 

Is there a noticeable difference in demand for higher-end stays compared to those with upper-midscale and midscale brands?

In simple terms, leisure demand has led the recovery, there’s no denying that. People want to get away to resorts, and where they can’t get away to resorts, they’re doing staycations in the city. Places that are unique yet accessible — case in point Maldives — are doing especially well. The Maldives opened up in October 2020 and we really haven’t looked back since. Towards the second half of the year, we were seeing 130–150 percent recovery compared to 2019 levels. Demand for that destination was incredibly strong from all over the world — the country has done a very good job of keeping the entry process very simple. And it’s such a unique destination that irrespective of the price, people just wanted to get out and go. Luxury hotels have led recovery on that front and demand has been strong even though China hasn’t been traveling. Because at one stage China was the number one market to Maldives, but all that was picked up by other markets, like the Middle East, Europe, the U.S., and India.

What we’re also seeing is a lot of what we call “bleisure,” which is people going and checking in to resorts for a week or longer. In many cases they’ve been going for a month, maybe two months, and actually making themselves at home there and working out of those places. So that’s the shift that has taken place across the world.

The pool and outdoor deck of a Garden villa at The St. Regis Maldives Vommuli Resort.

With international travel finally picking up, what trends are you forecasting for the months ahead?

Some folks were saying that meetings are going to disappear. Business travel is going to disappear — it’s going to be all virtual and Zoom is the future. What we’re quickly realizing is that that’s not the case. We humans are always very keen for face-to-face interactions. That personal touch is what drives us — we are social animals. And I’ve said this for quite some time, the way I see it is that when it comes to meetings, there will be some kind of a hybrid format although large meetings, small meetings, getaways will come back. As for bleisure, I think we’ll continue to see that people are going somewhere either for business or for leisure and saying “hey, I’m just going to take another few days to just work out of here while my family does something else.”

When we talk about leisure travel or general travel, my personal view, and we are seeing this trend come through, is that people have had a couple of years to self-reflect and think about their priorities, and what impact they as individuals are making in this world. So, what we tend to find today is that people are a lot more conscious as they travel, whether that’s giving back to communities, to the environment, and with that we launched the Good Travel with Marriott Bonvoy™ program in January of 2021 at 15 pilot hotels in Asia Pacific — it was very successful particularly in resort destinations. And as of earlier this month, we’ve expanded the program to close to 100 hotels in Asia Pacific. Just yesterday I got a great note from one of our guests in one of the resorts who said their highlight was being taken to the village close by, where they could spend time engaging with the local community. They thought that was just so meaningful. To me, that is the kind of experience people these days really go out and seek, and you will see that trend continue.

And then there’s the digital transformation, which leapfrogged across our industry during Covid, particularly when it came to how people were interacting, with businesses, or with each other. Some of that will continue. For instance, our app, which drives a lot of bookings to our hotels, is totally automated. The take-up rate on that is quite strong, because there are people who still have safety and hygiene concerns, so as a result they make their booking on the app, they’ll find out when they’re ready to check in on the app, they’ll show up at the hotel, they’ll navigate straight to the rooms with the app, use the mobile phone to open the door, use mobile chat to order room service and so forth, and then they’ll leave the hotel without having interacted with anyone. And if they’re loyalty members then their bills are sent across to them. So that’s the trend we see continuing to pick up, but is that the case for every guest? The answer is no. There are still a lot of customers who are very keen for that human interaction, who will walk up to the concierge and say, “tell me about the best place in town for a great Negroni or a great local meal.”

As part of Good Travel with Marriott Bonvoy, guests at The Westin Resort & Spa Ubud, Bali can join cleanups led by the local chapter of NGO Trash Hero.

How is Marriott Bonvoy helping to drive growth in the Asia-Pacific region?

Marriott Bonvoy has always been central to our strategy of driving loyalty and building an ecosystem where we can offer incredible hotels and experiences to our loyal members. And if you go back a little bit, we brought Marriott Rewards and SPG together a few years before the pandemic, and it just took off. To the point that pre-Covid we were signing, in Asia alone, close to a million members a month. So today we have over 55 million loyalty members across Asia Pacific, and 160 million globally, and membership continues to grow at a pretty strong pace.

Back in the U.S., we have a very, very strong co-branded credit card program with American Express as well as JP Morgan Chase. And those credit cards, which have Marriott Bonvoy on them, have done exceptionally well over the years. What we find is that if people have that card, then you get incredible loyalty, because they’re putting everything into those cards just to get the points so they can redeem stays at our hotels, host social functions, and so on. So, in the last few years we’ve launched those local co-branded credit cards in Japan and Korea, where we are seeing some incredible success, and we are going to continue to extend the program in some other markets this year.

The other thing about loyalty is, over the last few years, we have been partnering with or becoming sponsors of some major sporting events around the world with a simple mission: that we can create these money-can’t-buy experiences for our members.  For instance, we started sponsoring as of this year the Australian Open in tennis. I was there — I saw people bidding millions of points to watch the finals. And as a result, I met a group of our top customers who were there on the night when Nadal played Medvedev, and basically it was an epic game, and a lot of these members said, “listen, these are money-can’t-buy experiences, I’m a diehard Marriott Bonvoy fan for what you guys create and offer.”

In the U.S. we are also starting to offer insurance to our loyalty members as they travel, because there are some concerns about hygiene and safety aspects because of Covid. And in the second half of the year, we are going to be launching Ritz-Carlton Yachts, which is really going a little bit away from just the core hotel business. Marriott Bonvoy is going to be part of that, so people can use points, or people can earn points when they go and cruise. Similarly, Ritz-Carlton Reserve is now part of the Marriott Bonvoy program. So, it’s about creating an ecosystem of loyal members, who, when they think of travel, think of Marriott, and its beyond just hotels. Hotels are one key component of it, but let’s say you want to stay in a rented home or a villa in the south of New Zealand — you should be able to go on Marriott’s Homes and Villas site and book a beautiful home and earn Marriott Bonvoy points.

Then in the last two years we’ve been very focused on what I call hyper-localization. When international borders have been shut, our focus has really been on creating a breadth of experiences for our members in-market. We’ve been actively communicating with them and building their confidence so when travel comes back, they’re able to get out and go quickly. Case in point, we have in the last year or so announced some major partnerships — one with Rakuten, an e-commerce platform with more than 95 million Japanese as members. There’s only 130 million Japanese. So today those eligible Rakuten members have access to special rates from Marriott hotels across Japan or around the world if they want. In addition, we are able to communicate to them in their language.

In the second half of last year, we launched three new local language sites in Bahasa Indonesia, Thai, and Vietnamese. And this is on top of the sites we already have, which are Japanese, Korean, Chinese.  We are exploring ways to launch more in- language sites, be it in India with a Hindi site for example. Pre-Covid, our app was very much a marketing global app — you’d open the app and see an offer from Austin, Texas or Milan in Italy, but now we’ve localized it. Today when you open the Marriott Bonvoy app, it’s offering you solutions or promotional activity within the country first, or within the region, then beyond. Because we know people are first and foremost traveling within their own backyard, and then traveling to other destinations. Some of these hyper-localization strategies of engaging actively with our members on their home ground and creating these experiences for them have been very critical for us, particularly as we navigate through Covid.

Located in south India, JW Marriott Bengaluru Prestige Golfshire Resort & Spa opened this March.

There seem to be limitless opportunities in India given the sheer size of its domestic market. What is the outlook for Marriott there?

When I relocated to India to basically set up our area office or regional office back in 2007, we had six operating hotels by the end of that year. We’ve just opened our 130th hotel in India and we will by the end of this year cross the 150-hotel mark in South Asia, with a pipeline of another 60-odd hotels under construction. Hence, the demand is very, very strong. Similar to China, India has 1.3 billion people, and as they acquire wealth, their desire to travel domestically and globally is going to only get stronger. In addition, hotels are a big part of the social scene in India, be it big Indian weddings, or for that matter, just restaurants and bars. Indians love to go out and dine in hotels.

 

And how about the rest of Asia Pacific?

We are seeing incredible growth across the region as we speak. If you said to us five, six years ago, which were your two hottest markets in terms of growth, I would have said China and India. And they remain pretty strong. But case in point, Japan: through Covid, we opened close to 30 hotels in the country. Today we have 74 open hotels in Japan and a pipeline of another 30-odd hotels, which will get us to over a hundred hotels in the next couple of years.

Across ASEAN, we have over 180 operating hotels and over 100 hotels under construction. And then down in Australia and the Pacific, we anticipate to have 40-odd operating hotels by the end of this year and a pipeline of another 26 or 27 hotels under construction. So, when you look across the wider region outside of China, India is our biggest market today, with 130-odd hotels, but regionally speaking we are opening more than one hotel a week. We will end up at about 520 operating hotels and we have the largest pipeline of any hotel company in Asia Pacific ex-China, with about 270-odd projects on the go. Therefore, the growth has been incredible and largely driven by the incredible brands that we have, the strength of our loyalty program, and most importantly our people.

A Deluxe Emerald Bay room at JW Marriott Phu Quoc Emerald Bay Resort & Spa, Vietnam.

Marriott International has plans to quadruple its portfolio in Vietnam to 40 hotels. Could you elaborate on the new destinations and brands that will be part of the expansion?

Vietnam is another hot market in terms of travel and tourism. In the last 10 years or so, the country has been slowly opening up to travel and its government has been easing visa restrictions. The other thing you are seeing more recently is because of the U.S.-China trade issues that have been at play over the last few years, Vietnam is one of the countries that is a beneficiary of shifting of manufacturing out of China, and as a result, there is strong activity both on the corporate travel side as well as leisure travel. We are confident that MICE is going to follow. As a result, we have a number of partners who are keen to expand the portfolio and build Marriott International hotels.

About a year or so ago, we signed the largest hotel-branded residential project to date worldwide in Vietnam. The project is expected to add close to 4,200 residential and “officetel” units which will include branded units from JW Marriott and Marriott Hotels. And that’s in Ho Chi Minh City. We have also signed agreements to bring The Ritz-Carlton brand into the country, and we continue to see incredible opportunities from the luxury tier all the way down to what I would call the “select service” space. When you look at all of these business manufacturing hubs that are being set up around the country, you could easily put a Fairfield by Marriott, a Courtyard by Marriott, or a Four Points by Sheraton in those locations. But then you’ve also got all these great tourist destinations opening up. Be it Phu Quoc, where we currently have a stunning JW Marriott resort, Da Nang, Nha Trang, Ha Long Bay, or Sapa, where we’re expecting to open a JW Marriott. Vietnam is a country with some amazing offerings, and in the next 10 years it’s going to be an incredible growth story and a country to watch.

 

We’ve read that EDITION is coming to Singapore and Kuala Lumpur in the next few years. What can you share about the brand’s pipeline in Asia Pacific?

EDITION is definitely getting a lot of traction. I think about a year ago, Forbes rated it as one of the hottest brands in the hotel industry. We opened The Tokyo EDITION, Toranomon about a year and a half ago, and in the fourth quarter of this year, we will open The Tokyo EDITION, Ginza, which is going to be a stunning hotel. The EDITION, Singapore will follow sometime in early 2024, and then EDITION Kuala Lumpur will come after that. And there is a lot of demand for that brand: we’ve got 17 now open around the world and another 13 or 14 under construction as we speak. It’s just a brand that is making a lot of headway in the lifestyle luxury space and I think it will continue to grow at a rapid pace.

The St. Regis Bali Resort uses recyclable glass bottles and eco-friendly packaging for toiletries.

Marriott International has pledged to reach net-zero carbon emissions by 2050. What steps or policies are being implemented in the near- and medium-term to help meet that goal?

Being the largest hotel company in the world, we also believe it’s our responsibility to lead when it comes to sustainability, and making the world a better place. Even pre-Covid, in 2016, our CEO at that time, Arne Sorenson — who unfortunately passed away — had set out a 10-year goal to reduce carbon emissions by 30 percent, reduce food waste by 50 percent, and get rid of single-use plastic across all our hotels. And pre-Covid, we were tracking well on a number of these initiatives. Case in point: in 2019 we announced that we were going to get rid of all small plastic amenity bottles, because in the world of Marriott you can imagine, that means 500 million of these plastic bottles going to landfill every year. That’s just not sustainable. We said that we were going to replace them with big recyclable pump packs, and this is after getting rid of plastic straws and so on.

However, given the drastic impact it’s had on the industry, Covid has set us backwards a bit. And as we come out of it, our CEO now, Tony Capuano, has announced that we will get to net-zero either by or before 2050, and we are working with independent consultants to set very clear science-based targets that we will start to measure ourselves against, and put a very stringent program to move in that direction. We are not holding back as recovery is now well on its way, and we are already moving on a number of initiatives. By the end of this year, we will in most of our hotels have taken out those small amenity bottles — we would have pretty much gotten rid of single-use plastic across our portfolio in Asia Pacific. And we are working in many markets, if not all, on reducing food waste in a very aggressive way. In April, I was on a panel with the Singapore Environment Minister Grace Fu at the CleanEnviro Summit Singapore, and as a company we are committed, be it in Asia Pacific or globally, to lead the effort towards a more sustainable future.

But what I’m also very encouraged about is that countries like Singapore have laid out a 2030 Green Plan. The government there is basically asking, as of next year, for businesses to start tracking their carbon emissions. My view has always been this: what is measurable is achievable. So, when you start to measure things, you will figure out what you need to do to get there, be it setting science-based targets, or working with the Singapore government to make sure that we are best in class within the country or within Asia Pacific.

The ground-floor Ume Lounge at Higashiyama Niseko Village, a Ritz-Carlton Reserve, Japan.

Finally, what are some key lessons you’ve learned while leading Marriott International’s APAC division the past three years?

It’s been an incredible learning experience, first and foremost. The pandemic has been the single most difficult challenge for our industry in our lifetime. It has tested people mentally, emotionally, and a lot of our associates, our partners, our customers have had to deal with a lot of stress. But if I was to just look back and say, “what are some of the key learnings from my perspective?”, it would be that as you go into these crises, you’ve got to very early on double down on over-communicating with all stakeholders.

What happened in this case was that we were all locked up in our houses, and there was little in our control. What we did was we went on overdrive to aggressively communicate with all stakeholders, to just keep them aware of what was going on, what we were doing. We also used the opportunity to listen to our stakeholders, because in a situation like this, which is once in a lifetime, you don’t have all the answers. So, by listening, by engaging with all stakeholders, we came up with solutions that we could probably have not come up with if we were just driving it ourselves. We saw some incredible innovation, ground-up, and often organizations push innovation top-down. But when survival was being tested, people came up with some brilliant creative ideas, and they had this empowerment to go and do what they needed to do. That taught us a lot.

We also focused on the little that was in our control — for instance, the hyper-localization strategy that I talked about. In doing so, what we found was that we could make an impact, and it helped turn the crisis into an opportunity in some areas for us. As a result, we know that against many of our competitors, we are now in a better position coming out of the pandemic.

Putting your arms around your people at a time like this is critically important. When we had to make some very difficult decisions to let some of the team members go, our talent acquisition team became a talent outsourcing team. So, we went and spoke to a lot of our global partners — partners like Amazon, Accenture, and other major corporations that were hiring at a massive pace. They started giving priority to Marriott associates. While we were taking a massive hit, we also were able to help many of our team members find alternative jobs. We have the list of names of our alumni, and as business recovers, we are bringing them back in many markets. And we are tracking that. We’ve deployed millions of dollars of help for our associates that were worst-hit, and that came through in many ways.

It has been an extremely difficult time, but when a company has an incredible culture like ours, you are actually best positioned to deal with a crisis. You have to keep the team together, keep your arms around the talent, and just build on it, and just focus on what’s in your control versus worrying about what you can’t.

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