uploads///Marriott Loyalty Program

Innovation Is the Name of the Game for Marriott


Feb. 23 2017, Updated 12:44 p.m. ET

Customer loyalty

Marriott International (MAR) has realized that customer loyalty is the single most important factor in getting repeat and direct business. That could save the company huge costs for online travel agencies such as Priceline (PCLN), Expedia (EXPE), and TripAdvisor (TRIP).

Marriott has thus prioritized customer relationships. That has resulted in Marriott allowing customers to use points to pay for experiences such as museum tours, private wine tastings, and even Super Bowl packages. It has also given customers free Wi-Fi access and exclusive room rates.

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Largest loyalty program

Marriott’s integration with Starwood Hotels, which was completed in September 2016, created the world’s largest hotel chain. It also ended up creating the largest loyalty program in the hotel industry with 87.0 million members.

What’s commendable is that Marriott immediately allowed all its members to use the points across the 29 combined brands of Marriott, Starwood, and Ritz-Carlton.

Using artificial intelligence

Marriott also launched a new mobile app (application) in January 2017, which allows customers to get in touch with hotels directly. Customers can make their preferences known beforehand and use their smartphones as room keys across more than 500 properties. The app will also allow real-time messaging at a later date.

Eventually, artificial intelligence will allow Marriott to make customized recommendations to customers based on what they and their friends have shared with Marriott. This customer-first approach could help Marriott maintain its industry leader status.

You can get exposure to the consumer discretionary sector by investing in the iShares Russell 1000 Growth (IWF), which invests approximately 20.7% in the sector and 0.36% in the hotel industry. Its holdings include 0.08% in Wyndham Worldwide (WYN), 0.19% in Marriott International (MAR), 0.08% in Hilton Worldwide Holdings (HLT), and 0.009% in Hyatt Hotels (H).

In the next part of this series, we’ll see what investors are willing to pay for Marriott stock.


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