Marriott Group is a pretty well-known brand in the hospitality industry. They have managed to position themselves as one of the frontrunners across categories. This begs the question – how exactly does marketing work for the hospitality industry and what are the focus areas. There are so many external factors to consider like travel costs, customer preferences, regional relevance etc, and catering specifically to each segment can be quite a task. Furthermore, advertising in the hospitality space has been quite monotonous for years, with Marriott’s new upcoming offering Moxy, it is positioning itself as a brand for those young at heart. Storyboard18 caught up with Khushnooma Kapadia, vice president – marketing – South Asia for Marriott International to understand the above.
Edited excerpts.
Pricing is an interesting topic in hospitality. What factors dictate pricing in hotels? What causes it to increase and decrease?
Our pricing structure is meticulously crafted by considering key factors like hotel variations, customer profiles, and geographic regions among others. The primary objective is to consistently deliver an exceptional experience that surpasses customer expectations relative to the cost incurred. This has resulted in a personalized approach that tailors our pricing strategy to align with the unique offerings of each hotel in our portfolio. That being said, our pricing is dynamic, and both increases and decreases can occur based on changing circumstances.
Emphasizing the impact of seasonal demand on cost, the prices tend to surge during peak seasons when demand for hotel rooms is high, and conversely, they may fall during off-peak seasons when demand is comparatively lower. Elaborating on peak seasons, I’m speaking of special events like the recent Ram Mandir inauguration at Ayodhya and IPL, seasonal holidays, and days such as Valentine’s Day, long weekend that play a significant role, with prices often rising due to increased demand and higher occupancy levels.
Speaking of economic conditions, factors such as inflation, changes in currency exchange rates, and overall economic stability, are carefully considered in our pricing decisions. Competitive pricing is another crucial aspect, with our brand actively monitoring competitors’ prices and adjusting to maintain the top position in the market.
That brings me to our next point of market conditions. Shifts in tourism trends or the opening of new attractions, are also something we keep an eye on and carefully analyze as that also affects our overall pricing strategy. We incentivize advance bookings through discounts, encouraging early reservations and aiding in demand forecasting. On the other hand, last-minute deals are offered to fill unsold rooms and avoid revenue loss.
Distinguishing between weekdays and weekends, our pricing reflects variations in rates, with higher rates often applied during weekends when leisure travelers are more likely to stay. Prices may also increase during hotel renovations or upgrades, especially when these enhancements result in improved facilities and services.
With domestic travel getting more expensive by the day, how does a hospitality company justify the increase in price?
Despite a significant rise in the cost of travel, fueled by various factors, there continues to be a robust demand for travel. This resilience is attributed to individuals seeking to recover the time lost during the pandemic, and remarkably, travel remains a flexible expense that people are willing to uphold or even increase.
At Marriott, our prices are intricately determined by the principles of demand and supply, reflecting a strategic blend of market research and guest expectations. Each property’s unique features that also play a significant role in the charges, include location, size, market demographics, level of competition, and services offered. We prioritize delivering value and benefits that resonate with our guests, building on the connection to our brand and social proof. That said, we understand the diverse budgets and travel needs of our customers and hence there is a range of options for one to choose from. Through our dynamic loyalty program, Marriott Bonvoy, and our extensive footprint in India (148 hotels) and South Asia (160 hotels), we ensure a Marriott is where you want to go. Members enjoy opportunities to redeem stays, along with substantial discounts and benefits across dining, spa, and recreation services.
What are some of the consumer patterns you’ve witnessed in the last year and what do you expect will stick in 2024?
The year 2024 is poised to be a transformative journey in the dynamic landscape of hospitality, promising innovative trends, technological advancements, and evolving guest expectations as the industry recalibrates in response to global shifts and emerging consumer behaviors.
One key trend anticipated is the increasing prominence of sustainable practices in the hospitality sector. Hotels and resorts are now prioritizing environmentally friendly initiatives, encompassing water and energy conservation, as well as the use of eco-friendly products. Not only do these measures contribute to environmental preservation, but they also positively impact business sales.
Another significant aspect is the enhancement of customer experience through technology. The development of mobile apps has proven to be a valuable tool for hoteliers, where customers can easily share their stay experiences, provide feedback, and submit reviews directly through the platform. Furthermore, user and time-friendly features such as online booking, diverse payment options, personalized purchasing experiences, and mobile check-in have enhanced ease and comfort for both hotels and customers.
The integration of technological advancements is a key trend, with hoteliers leveraging modern technologies and advanced digital marketing techniques. Strategies include email marketing, promotions through mobile apps, and the incorporation of artificial intelligence and augmented reality. These advancements play a pivotal role in boosting business sales and attracting a larger customer base.
The utilization of chatbots for communication is becoming increasingly prevalent in the hospitality sector. Effective chatbots, such as ChatGPT, facilitate instant responses to customer queries and enable guests to share feedback on their travel experiences. They also make it easier for customers to search for information using specific keywords, improving overall communication between businesses and customers.
Lastly, there’s a heightened focus on wellness amenities. Hotels now offer a diverse range of wellness-centric services, including meditation and yoga classes, healthy dining options, spa services, fitness centers, and in-room features promoting fresh air and ventilation. This holistic approach to guest well-being enhances the overall stay experience. Marriott is committed to embracing these trends, ensuring that our guests receive exceptional service, innovative amenities, and unforgettable experiences. As we navigate the evolving landscape of hospitality, we remain dedicated to meeting and exceeding the expectations of our guests.
Does a hotel group have to cater to different parts of India separately? Urban cities differently and tier 2 and 3 cities differently?
Marriott believes in addressing the diverse needs of urban cities and tier 2 and 3 cities is a critical consideration for a hotel group. This stems from variations in market dynamics, customer preferences, and economic factors. The success of a hotel group lies in recognizing and adapting to the unique characteristics of each location, tailoring services and marketing strategies to fit the specific context of urban regions, tier 2 and tier 3 cities within the hospitality industry.
There are several key factors that underscore the necessity for differentiated approaches in our operations. Firstly, the demographics and preferences. Urban cities, characterized by diverse and cosmopolitan populations, necessitate a focus on providing a broad range of services such as business facilities, fine dining, and entertainment. In contrast, tier 2 and 3 cities, with more localized demographics, may require tailored offerings aligned with regional tastes and preferences.
Secondly the business and leisure travelers as the nature of travelers varies between urban cities and tier 2 and 3 cities. While urban areas attract a significant number of business travelers, tier 2 and 3 cities may see a higher proportion of leisure travelers. Accordingly, hotels must emphasize business-friendly amenities and services in urban areas, while prioritizing amenities and activities suited for families, tourists, and local events in tier 2 and 3 cities.
Also, the economic considerations that come into the picture as urban areas generally have a higher cost of living, and hotels may need to factor in higher operational costs. Pricing strategies in urban cities might be influenced by the overall economic affluence of the population. Tier 2 and 3 cities may have different economic dynamics, and hotels may need to adopt pricing strategies that align with local affordability and spending patterns.
Additionally, we keep in the mind the competition as urban cities often feature a more competitive hospitality landscape, necessitating differentiation to attract customers in a saturated market. Conversely, tier 2 and 3 cities may have less competition, prompting hotels to focus on providing unique offerings to stand out and capture the local market.
Factoring in the infrastructure and development is also important. Leveraging advanced systems and services is crucial for hotels in urban cities, given their better infrastructure, connectivity, and access to technologies. In tier 2 and 3 cities, which may be in different stages of development, hotels must adapt to available infrastructure while contributing to local development.
Lastly, we strive to be culturally sensitive. Recognizing the impact of cultural differences on hospitality preferences, hotels in different cities should prioritize cultural sensitivity. Adapting to local customs and traditions ensures a more personalized and welcoming experience for guests.
In essence, I’d like to stress that success in the hospitality industry requires a nuanced and tailored approach to meet the specific demands and expectations of each city, aligning with the diverse landscape of urban, tier 2, and tier 3 cities.
How do you target specific consumer segments across the globe? Is marketing different for Indians and foreigners?
At Marriott we employ a multifaceted approach to target specific consumer segments across the globe. Our strategy involves a deep understanding of diverse cultures, preferences, and travel behaviours, allowing us to tailor our marketing efforts to resonate with different audiences effectively.
To reach specific consumer segments, we leverage data analytics and market research to identify key trends and preferences in each region. This enables us to create personalized campaigns that speak directly to the interests and needs of our target audiences. Whether it’s business travelers, luxury seekers, or family vacationers, our goal is to provide a seamless and enriching experience that aligns with their expectations.
Regarding the distinction between marketing for Indians and foreigners, we recognize the importance of cultural nuances and individual preferences. Our marketing teams work closely with local experts and utilize insights from our extensive global network to craft messages and campaigns that are culturally sensitive and resonate with each target group.
While the core values of the Marriott brand remain consistent worldwide, we acknowledge the importance of tailoring our communication to cater to the unique characteristics of each market. From language preferences to cultural symbols, our marketing materials are adapted to ensure relevance and connection with both Indian and international audiences.
To sum it up, our approach involves a delicate balance between global consistency and local relevance. By understanding the distinct needs and expectations of diverse consumer segments, we aim to provide a personalized and memorable experience for every guest, regardless of their background.
Advertising and marketing in the hospitality industry has been largely monotonous over the years. How do you see it evolve?
In the hotel industry, digital marketing holds significant importance as it serves as a potent means to connect and interact with prospective guests. In the contemporary digital environment, where travelers heavily depend on online channels to investigate, compare, and secure accommodations, a robust digital marketing plan is indispensable for hotels to amplify their presence across relevant online platforms to draw in reservations.
Digital Transformation: The hospitality industry has been increasingly embracing digital marketing strategies. This includes leveraging social media platforms, search engine optimization (SEO), and online advertising to reach a wider audience. Mobile apps and websites have become crucial tools for booking accommodations, making reservations, and accessing information about services.
Personalization and Customer Experience: Personalized marketing efforts are gaining prominence in the hospitality sector. Using data analytics, businesses can tailor their advertising messages to specific demographics, preferences, and behaviors. Enhancing the overall customer experience is a key focus, as positive experiences often lead to word-of-mouth marketing and repeat business.
Influencer Marketing: Collaborating with influencers and bloggers in the travel and hospitality niche has become a popular strategy. Influencers can help create authentic content that resonates with their followers, providing exposure and endorsement for hotels, restaurants, and other hospitality services.
Video Content: Video marketing continues to be a powerful tool for the hospitality industry. Platforms like YouTube and social media channels support the sharing of visually appealing content, such as virtual tours, destination highlights, and behind-the-scenes glimpses, to engage potential customers.
Local and Sustainable Marketing: There is an increasing focus on promoting local experiences and sustainable practices in the hospitality industry. Businesses are incorporating these values into their marketing strategies to attract environmentally conscious consumers and those seeking authentic, locally sourced experiences.
Technology Integration: Emerging technologies, such as augmented reality (AR) and virtual reality (VR), are being used to enhance marketing efforts in the hospitality sector. These technologies can provide immersive experiences, allowing potential guests to preview accommodations or explore destinations virtually.
Crisis Communication and Adaptability: The COVID-19 pandemic highlighted the importance of adaptability and effective crisis communication in the hospitality industry. Businesses have had to pivot their marketing strategies quickly, emphasizing safety measures, flexible booking options, and other relevant information.
How is the advertising media mix for the hospitality industry as well as Marriott generally spread out? How much of it is on TV, digital, OOH, radio, etc.
Marriott places a significant focus on digital marketing strategies to connect with its target audience, employing online advertising, email marketing, and social media campaigns to showcase specific brans/hotels, seasonal & targeted campaigns and the overall value propositions under the Marriott Bonvoy loyalty program. In terms of the bifurcation of budgets across communication platforms, safe to say digital takes approx. 60 percent of the pie, while the remaining is split across print, OOH, radio etc. This holistic strategy complements our digital initiatives, creating a unified and impactful marketing approach that resonates with a diverse audience.
How will Moxy help Marriott’s portfolio in India?
The launch of the Moxy brand holds strategic importance for Marriott International in India due to several key factors. First and foremost, it is a testament to our commitment to innovation and adaptability in response to evolving consumer preferences. Moxy represents a dynamic and contemporary hospitality offering, uniquely tailored to meet the expectations of the modern traveler. By introducing this brand to the Indian market, we aim to redefine the hospitality experience and engage with a new demographic of guests seeking a vibrant and socially immersive stay.
India, with its robust economic growth and burgeoning middle class, presents a compelling market for expansion. We recognize the need to continuously evolve and diversify our portfolio to remain at the forefront of the industry, and Moxy’s introduction aligns seamlessly with this strategic imperative. With increasing urbanization, a thriving business ecosystem, and a surge in both domestic and international travel, we see this as an opportune moment to bring Moxy to the Indian shores. The brand’s contemporary design paired with its tech-forward amenities, is poised to resonate with the discerning Indian traveler who seeks a blend of style, innovation, and social connectivity. The launch of Moxy in India emphasizes Marriott International’s strategic vision, adapting to market dynamics, and addressing the evolving needs of today’s travelers. We are excited about the prospects this venture brings and look forward to contributing to the vibrancy of the Indian hospitality landscape.
Moxy seems to cater to a younger audience. How is that?
Moxy doesn’t exclusively focus on the younger audience, rather, it is built for every person who is young at heart, who carries a playful spirit. This approach recognizes that a youthful mindset and a sense of playfulness can be found in people of various ages, transcending generational boundaries. Moxy hotels are designed to foster an inclusive atmosphere that welcomes guests of all ages who share a vibrant and playful outlook on life. The emphasis is on creating a community where people with diverse backgrounds and experiences can come together. This inclusive approach allows Moxy to connect with a diverse range of individuals who share a common appreciation for a lively and spirited atmosphere.
Do consumers really look at who the hotel caters to? One would usually choose a hotel they find valuable. Then, how does Moxy position itself in the market?
The hotel industry is constantly changing and there are different types of travelers segmented into broad groups for instance backpackers, families, solo travelers, couples, vacationers, adventurers, business travelers, etc. These are some of the main types of tourists you might segment into your hotel target market but each, of course, have many independent characteristics e.g., location, income, etc. that influence their travel trends and behaviours.
Moxy is a game-changer for the hospitality industry, combining affordability, innovation, and social engagement. The brand is designed for modern travelers seeking a dynamic lifestyle experience in India. Speaking of it’s positioning in the market, I’d like to elaborate on its price points, amenities, uniqueness among others.
Price Points: Moxy Hotels are positioned as an affordable yet stylish option, appealing to the “fun hunters” or the modern traveler seeking an energetic and socially engaging experience. The pricing strategy is designed to provide excellent value without compromising on quality, offering a fresh alternative for budget-conscious yet discerning guests.
Amenities: The hotel projects contemporary design, tech-forward amenities, and vibrant social spaces. From co-working areas to innovative in-room features, such as mobile check-in and smart room controls, Moxy caters to the evolving preferences of guests who prioritize a seamless and connected experience.
Positioning: We want to position Moxy as a bold and playful brand, distinguishing itself through its spirited design, lively atmosphere, and a commitment to fostering social connections among guests. It caters to the next generation of travelers seeking not just accommodation but a dynamic and memorable lifestyle experience.
Differentiation within Marriott’s Portfolio: Moxy as a brand stands out within our diverse portfolio by targeting a unique niche. Unlike some of our other brands that may target specific demographics or travel purposes, Moxy is designed for the socially conscious and tech-savvy traveler who values affordability without compromising on a contemporary and energetic atmosphere. It is for anyone who is ‘Young at Heart’, this is our motto for the brand. It complements our existing offerings by providing a distinctive option for a new and growing segment of the market.
First-of-its-Kind in India: Yes, Moxy Hotels represent a first-of-its-kind brand in India. The brand’s innovative approach to hospitality combined with its emphasis on affordability and social engagement, is a novel concept in the Indian market. As demonstrated in other global markets, Moxy’s introduction to India is expected to set new benchmarks for the industry, resonating with the preferences of the young and experiential traveler.
Disruption in the Sector: Moxy’s disruptive potential lies in its ability to redefine the budget and lifestyle segment by offering an experience that goes beyond traditional expectations. By tapping into the growing demand for unique and socially connected accommodation, Moxy has the potential to reshape the landscape of the hospitality sector in India. We anticipate that its energetic vibe and innovative offerings will create a new paradigm, influencing consumer expectations and compelling competitors to adapt to changing trends.
Moxy Hotels in India represent a strategic move by Marriott International to address the evolving needs of the market, offering a fresh and dynamic hospitality experience. We believe that the brand’s unique blend of affordability, innovation, and social engagement will make a significant impact on the sector.