Marriott Sings Praises of Marriott Bonvoy Loyalty Program During Q4 2019 Earnings Call
During Marriott International, Inc.’s recent Q4 2019 earnings conference call, CEO Arne Sorenson had nothing but praise for the company’s loyalty program: Marriott Bonvoy.
According to Sorenson, Marriott Bonvoy membership grew to more than 141 million members at the end of January 2020, and in 2019 paid room revenues from loyalty members increased 11%.
“This powerful platform remains a key competitive advantage,” he noted.
Member share of occupied rooms topped 52% worldwide in 2019, up 250 basis points versus 2018 and reached 58% in North America, up 320 basis points year-over-year.
The company also saw an additional benefit to the increase in Bonvoy members: more guests booked direct in 2019.
“Worldwide direct bookings including group sales, rooms booked by our reservation centers and bookings made on our digital platforms represented approximately three quarters of total room nights booked during the year,” Sorenson said. “Direct digital bookings alone represented one-third of room nights. Mobile bookings a component of direct digital bookings were up a strong 64% over the year. At the same time, the percentage of nights booked through OTAs declined year-over-year.”
Google, Paid Search & Marriott
During the Q&A section of the call, Sorenson was asked about how the changes recently made by Google – resulting in less free organic traffic coming to travel websites – was affecting the brand.
“We're watching what Google is doing very, very closely,” Sorenson said. But ultimately, he feels that these changes affect OTAs more than they affect the Marriott brand. Why?
He explained that in general, the company does not want to and will not pay for paid search. According to Sorenson, someone who is searching for “Marriott New York” is looking for a Marriott hotel and will find the Marriott website regardless of paid search because they are focused on finding the brand. Similarly, the brand is not interested in paying for “Hyatt New York” either because that customer is focused on a different brand. OTAs, on the other hand, sell rooms for every hotel brand and so they would be much more interested in having Google send a potential customer their way so that they can make the commission on that particular booking.
“The first impact of changes by Google in their strategy are much more relevant to the OTAs than they are to somebody like us,” he noted. “But we are watching this very, very carefully. We've obviously got a good partnership with Google and there's a lot of volume that comes through our digital channels.
“And we'll look for ways that we can use those tools to help us do what we want to do which is particularly find customers who are not now in our loyalty ecosystem,” Sorenson added. “Find a way to bring them into our ecosystem. And if we can do that in a way that is cost effective we'll do it.”