Opens in new windowThe travel industry has emerged as one of the big winners of the post-pandemic era. From the moment lockdowns lifted, tourists flocked to destinations both exotic and domestic. This was about more than making up for lost time; numerous surveys of spending habits show that customers are steering spending away from tangible goods and towards experiences of all kinds.
Marriott International, which puts its stamp on over 9,000 properties in 142 countries across its more than 30 brands, has been rapidly evolving its approach to hospitality to meet this new demand. Nowhere is that truer than in the company’s luxury division. While customers of all income levels travelled more post-Covid, the explosion in tourism among the wealthy has proven the most enduring. What these tourists want is also changing. Many now approach travel holistically; the hotel is no longer just a place to sleep, but an integral part of the experience. For high-net-worth travellers, this means fine dining, personalised experiences and high-touch hospitality.
Marriott is in the midst of a rapid expansion of its luxury properties, with committed plans as of the third quarter of 2024 to open an additional 245 luxury hotels in the coming years under brands including St. Regis, Ritz-Carlton and JW Marriott. The company is also finding success with a push into new luxury tourism hotspots such as India, and with hospitality formats, including yacht cruises and all-inclusive resorts that put a high-end spin on categories that haven’t always had the best reputation among luxury travellers. Marriott is also taking a more active role in shaping customers’ stays, whether through retail partnerships or resorts built around adventure.
BoF: For a couple of years after the lockdowns lifted, we saw this huge surge in travel, pretty much across the board, at every price point, every destination. We’ve seen something of a return to normal and even signs of a slowdown in certain segments. How are things looking at the high end of the market?
Tina Edmundson: We are definitely seeing some normalisation in markets like the US, as well as in Greater China. We continue to see huge demand and numbers in the rest of the world, including countries like India, all of Europe and the Middle East.
Even within luxury, ultra-luxury seems to be quite unaffected. They exist above the fray, if you will.
I will say, overall, luxury travel is still on the rise. We see that as customers continue to trade goods and things in order to have experiences. Travel is a wonderful canvas to be able to do that.
Customers continue to trade goods and things in order to have experiences. Travel is a wonderful canvas to be able to do that.
BoF: The absence of Chinese tourists in many international destinations has been a huge story since their lockdowns lifted. How is Marriott working to get those customers back?
TE: Luxury travel in China is moderating, which is different from the Chinese traveller outside of China, where we are actually seeing quite a big pickup. They’re cautious, and so we’re seeing a lot of last-minute, shorter-term bookings.
BoF: Your CEO recently said there are signs, even in the luxury sector, of travellers pulling back on certain types of spending [such as] food and drink. How does that manifest at your locations?
TE: It really depends on where the customer is and what they’re looking for. Post-pandemic, customers that are not necessarily high-net-worth are trading up. [But] they’re being conscious of where they want to spend. So yes, they are choosing the five-star location but will be much more surgical about where else they want to spend their money during that vacation. It might be instead of five nights of gourmet restaurants, I might be doing that twice.
BoF: There’s been this huge ramp-up at the very top of the market, $1,000-plus-per-night hotel rooms, for instance. What’s driving that and is there still much more room to grow with these ultra-high-net-worth clients?
TE: There has been a real mindset change. [The pandemic] proved to us that travel was not discretionary. People realised that they needed to travel for their own wellbeing; it became fundamental. They’ve realised that life is too short. Instead of putting off trips, they have converted their bucket list into a to-do list.
As they’re doing that, they want to do it in a way that will create memories. For a segment of the population, that means trading up, and that means creating these experiences for themselves and their loved ones that are meaningful. So that’s where we have seen a couple of things happen. One, to your point, the price of these experiences is high, but I would also argue that what you’re getting is different from what you used to get. We’re curating experiences for you. It’s really at a different level.
I don’t think it continues to accelerate at the rate that it did coming out of [the pandemic]. Do I think it is durable? Yes, I think it will continue.
BoF: On that experiences front, Marriott is experimenting with some new formats, the all-inclusive resort, the Yacht Collection. What have you learned from these projects and what else might be in the pipeline?
TE: Part of our mission is to make sure that we are in places that you want to be, whether it is physical places or experiences. Part of our strategy is really to grow our ecosystem, and to continue to keep [customers] interested and keep them loyal.
All-inclusive is a great one. Whereas at one point, all-inclusives were seen as bad buffets and cheap booze, our mission is obviously to turn that on its head. We [opened] our new, all-inclusive, luxury collection, called Almare, right outside of Cancun [in October]. We’ve signed a couple of Ritz-Carlton all-inclusives. We have a W all-inclusive that we’ll open next year in Punta Cana.
We just launched our second yacht, the Ritz-Carlton Yacht. Again, when you think about cruises, one can conjure up in your mind what that looks like. Ours feels like a Ritz-Carlton at sea. About 50 percent of people that sail on our Ritz-Carlton yacht are new to cruise. We are clearly attracting a different consumer because they want the Ritz-Carlton experience, but they don’t want the cruise experience.
The other thing that we are seeing and that we are acting on is this consumer wants adventure and they want new and exciting ways to travel. We launched the JW Masai Mara Lodge a year ago. That has done extremely well — since then we’ve also signed three Ritz-Carlton tented lodges and camps, and several other JWs, as well as Luxury Collection ones.
BoF: How do you personalise these experiences?
TE: Technology plays a big role in it. The ability to capture preferences that customers want to share with us, so that we can provide a better stay. The second part of it is the training that we do on property with associates. Making sure that they are very keenly focused on what guests need, to be able to respond to both expressed as well as unexpressed needs, which really then creates that wow moment. Then the third piece of it is we have a programme for our most important customers, where we provide a personal ambassador [who] will take care of your every need.
This is a fun story. There’s a gentleman who wanted to propose to his [girlfriend], he said he wanted it to be a surprise. So, he told her that he was going to a conference. The hotel actually sent them conference materials, so it felt totally real. The hotel really ended up being this wonderful platform for him to be able to actually propose, and the hotel was in cahoots with him.
BoF: I was curious if there’s any new frontiers you’re exploring on [the personalisation] front, whether it’s technology or just a different type of experience that you’re looking at.
TE: The way we look at it is more of how do we use [technology] to remove the friction and the transaction from the experience. When we think about AI we think about, how can AI help with the grunt work? So that you can actually then just have a conversation with the guest about what they want to do or where to go.
BoF: Are you open to the idea that AI potentially is also customer-facing?
TE: Maybe we’ll make such advances in AI that we’ll all be surprised, but for right now, [luxury travellers are] very much looking for that personal endorsement. What am I really going to get? Can I make sure that the wine that I select is exactly this one, from this year, this vintage? You don’t get that through technology; you have to get that through people.
BoF: Tell me how Marriott thinks about retail within your properties. What makes a good partnership?
TE: We love the relationship between hospitality and retail. They are so complementary. When people travel, they’re much freer. They’re not bogged down by all of the stuff that bogs us down at home, whether it’s the kids or the job or whatever. So they are much more open, and much more willing to explore, willing to discover and willing to spend.
When people travel, they’re much freer … they are much more open, and much more willing to explore, willing to discover and willing to spend.
It’s a win-win, for the retailer and for the hotel. When we look for partners, we’re looking for brands that match our ethos. So, what makes sense for St. Regis may be different for what makes sense for JW.
Then we’re looking for how does that brand [fit into] the guest’s stay? One that we’ve done is the St. Regis with Vilebrequin. We have a broader relationship with them, four or five hotels, capsule collections, and hugely popular. Then you have the one-offs. Ritz-Carlton Bali, Missoni is going to do a store actually in the hotel, and they’re also doing a beach club. It is about bringing their brand to life.
This interview has been edited and condensed.
This article first appeared in The State of Fashion: Luxury, an in-depth report on the global luxury industry, co-published by BoF and McKinsey & Company.
