{"id":15682,"date":"2022-10-03T13:03:06","date_gmt":"2022-10-03T17:03:06","guid":{"rendered":"https:\/\/d3.harvard.edu\/platform-digit\/?post_type=hck-submission&p=15682"},"modified":"2022-10-03T13:06:05","modified_gmt":"2022-10-03T17:06:05","slug":"marriott-data-driven-customer-experience-for-decades-at-scale%ef%bf%bc","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/marriott-data-driven-customer-experience-for-decades-at-scale%ef%bf%bc\/","title":{"rendered":"Marriott: Data-driven Customer Experience for Decades at Scale"},"content":{"rendered":"\n\n\n

Marriott International<\/strong><\/p>\n\n\n\n

Marriott International, Inc. is a diversified hospitality company, more than a hotel franchise. The company is engaged in operating, managing, franchising, and licensing a broad portfolio of hotel, residential, lodging, and timeshare properties under 30 different brands including the Sheraton, Le Meridien, Westin, Aloft Hotels, Fairfield, Four Points, and other brands (Figure#1).<\/p>\n\n\n\n

Marriot International also has an in-house department called Marriot Digital Services (MDS), which uses data-driven technologies to streamline its system, optimize its strategy, and find new directions to grow.<\/p>\n\n\n\n

\"\"<\/a>
Figure.#1<\/figcaption><\/figure>\n\n\n\n

<\/p>\n\n\n\n

Value of Data from the 80s<\/strong><\/p>\n\n\n\n

In the late 70s, Marriott was running out of sites where more traditional hotels could be built, while competitors like Holiday Inn were occupying their market share. Marriott needed to open a new market for growth, and seize back existing market share, while not cannibalizing their existing clients \u2013 they needed a new brand and product. Even before the term was coined, Marriot used data science to arrive at their solution for Courtyard, by Marriott. Marriott used conjoint analysis conducted on customer surveys to predict the market share that the product could deliver and then demonstrate the accuracy of these predictions through pilot tests (Figure#2).<\/strong><\/p>\n\n\n\n

\"\"<\/a>
Figure.#2<\/figcaption><\/figure>\n\n\n\n

It is quite impressive how their solution was in how the team designing their customer survey maintained a clear view of how given outputs mapped back to the management questions for the new product. This study changed management\u2019s mind and instead of building smaller versions of Marriott hotels, they created hotels with an entirely new and different concept, \u2018nice but affordable\u2019 \u2013 Courtyard by Marriott. This study guided to an investment of $200 million per year in revenue from the pilot test, with a billion dollars in revenue per year.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Revenue Optimizing System (ROS) 2014<\/strong><\/p>\n\n\n\n

With such early year experience, the hotel chain recognizes the value of innovation and understands how to use data to guide decisions. Its Data Strategy and Governance team implements innovative solutions to provide decision-makers with timely access to high-quality, integrated data.<\/p>\n\n\n\n

In 2014, Starwood hotels heavily implemented dynamic pricing automation, when was not long before merging with Marriott International in 2016. The hotel chain invested more than $50 million in its Revenue Optimizing System (ROS), which can integrate data from both internal and external sources and suggest optimal prices based on the results of its real-time analysis and demand forecast. For example, if during the Christmas season North American consumers are more willing to spend a week of vacation in New York, the ROS will automatically adjust rates. With dynamic pricing automation, Marriott is able to maximize its profit and ensure adequate staffing.<\/p>\n\n\n\n

\u201cThe hotel chain Marriott has been using Big Data Analytics to start predicting the optimal prices of its hotels\u201d (Forbes).<\/p>\n\n\n\n

<\/p>\n\n\n\n

Marriott and IBM\u2019s <\/em>Cloud Technology 2015 and AI for Customer Experience 2020<\/strong><\/p>\n\n\n\n

Around 2015, Marriott adopted IBM\u2019s cloud technology to offer faster digital services to clients and to discern insights from the company\u2019s international properties. Using the infrastructure of IBM\u2019s public cloud computing platform, Marriott migrated a significant part of its core IT system and applications to IBM. IBM\u2019s analytics software was utilized and called Big Insights inside the Marriott. The main goal of using IBM\u2019s cloud was to gain rapid analytics of early-stage data patterns and to scale new services on a global scale.<\/p>\n\n\n\n

After Marriott\u2019s path toward a cloud-based, consumption-modeled business line with IBM, it continued the relationship with IBM to support the Marriot Bonvoy platform \u2013 the largest loyalty program in the industry with more than 140 million members accessing various brand portfolios, points toward free hotel stay, travel experiences and other benefits. This Bonvoy platform, using data and AI, enabled Marriott with faster-targeted marketing, competitor monitoring, and tailored customer services. Just as we saw from the Booking.com case study, along with the customer feedback from Bonvoy Marriott formed a very straightforward methodology for A\/B Testing cycle (Figure#3 and Figure #4).  <\/p>\n\n\n\n

\"\"<\/a>
Figure.#3<\/figcaption><\/figure>\n\n\n\n
\"\"<\/a>
Figure. #4<\/figcaption><\/figure>\n\n\n\n

<\/p>\n\n\n\n

Challenges and Opportunities<\/strong><\/p>\n\n\n\n

While using data analytics and AI for the business, understanding that not all data has the same value and is actually actionable is critical. Data can be reactive, predictive, or proactive – meaning it can give insights about past activities, help quantitatively predict outcomes or qualitatively prescribe what steps should be taken in the future. What should look at depends on the goals.<\/p>\n\n\n\n

Marriott also has suffered hacking attacks since 2014. Hackers breached the hotel chain in 2014 to access almost 340 million guest records worldwide, then in 2020, Marriott was hacked again in a separate incident that affected around 5.2 million guests. Recently, Marriott has confirmed another data breach with 20 GB of sensitive data, including guests\u2019 credit card information.<\/p>\n\n\n\n

\n\n\n\n

<\/p>\n\n\n\n

<\/p>\n\n\n\n

Sources<\/strong><\/p>\n\n\n\n

Armerding, T. (2018), \u201cThe 18 biggest data breaches of the 21st century\u201d, available at: www.csoonline. com\/article\/2130877\/the-biggest-data-breaches-of-the-21st-century.html (accessed 26 September 2022).<\/p>\n\n\n\n

https:\/\/marriott.gcs-web.com\/static-files\/c5e1faef-f1e5-40e3-bd70-5efbbb929a7f<\/a><\/p>\n\n\n\n

Paul Green et al (1989), \u201cCourtyard by Marriott: Designing a Hotel Facility with Consumer-Based Marketing Models\u201d<\/p>\n\n\n\n

https:\/\/hoteltechreport.com\/news\/yield-management<\/a><\/p>\n\n\n\n

https:\/\/www.infosecurity-magazine.com\/news\/marriott-plays-down-20gb-data\/<\/a><\/p>\n\n\n\n

Hotel And Other Travel Accommodation Global Market Competitor Briefing 2021<\/p>\n\n\n\n

Virtual and Augmented Reality: Technologies and Global Markets, August 2018<\/p>\n","protected":false},"excerpt":{"rendered":"

Marriott uses Big Data technologies across its hotel chain operations. 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