OVERVIEW OF INDUSTRY & MAJOR PLAYERS

What is Hospitality?
The hospitality industry is unique among other industries in both its breadth and
pervasiveness throughout everyday life. From accommodation such as hotels and serviced
apartments, to catering and entertainment, to travel agents and cruise operators, the
hospitality industry plays an important role in both leisure and business. Most sectors are
dominated by a very small number of firms — a handful of big names. Because the
hospitality industry is so varied, however, the number of well-known businesses involved is
also impressively large, including international hotel and restaurant chains, travel operators
and many, many more. In this article, you’ll find out more about the different sectors that
make up the hospitality industry.

Defining the Hospitality Industry:

The hospitality industry is part of the travel industry and the hotel industry is part of the
hospitality industry. All of these industries have in common that they are large service
industries in the world and increasingly important in the modern age.
Despite its varied and multifarious character, the industry does have two main defining
features. One is its reliance on leisure and luxury activities and services rather than basic
physical needs, making it vulnerable during times when the economy is struggling. The other
is its chief focus: customer satisfaction. You could certainly make the case that this is true for
virtually any business — after all, without satisfaction; an organization would quickly lose
customers. That said, this particular industry is more heavily reliant than any other on
customer satisfaction; because the sector is chiefly sustained by luxury and leisure-related
activities, customer satisfaction goes from being a marketing tool to the main service on
offer.

The hospitality industry can be divided into three general sectors: accommodation, food and
drink, and travel and tourism.

Hospitality: A Complete Overview of the Sectors

1: Accommodation

This hospitality sector deals with providing places for people to stay. These range from basic
lodgings intended for stays of one or two nights, such as a motel or youth hostel. These might
offer facilities such as shared dormitories or small private rooms containing minimal
furnishings. On the other end of the scale are establishments such as luxury hotels and resorts
offering higher-end facilities, as well as serviced apartments which may be used for longer-
term accommodation.

Bed and BreakfastsThe bed and breakfast or B&B is a fixture of the budget
accommodation sector. As the name suggests, guests at a bed and breakfast receive
lodgings in a shared or private room and at least one catered meal per day.

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 Hotels
Hotels are a little higher up the scale than bed-and-breakfast accommodation. Rooms
may be basic, with access to a shared bathroom; luxury hotels offer large suites. Some
hotels offer extensive facilities and services, such as spas or gymnasia.

Motels
Motels focus on short-term lodgings, often aimed at those taking long journeys who
need a place to break their trip for a night or two. Facilities tend to be basic and
practical, although there are higher-end chains and ―theme‖ motels have their fans.

Hostels
Popular with younger guests and other budget travelers, hostels offer basic comforts
in a convivial atmosphere. Lodgings may include private rooms but often focus on
large shared dormitories furnished with multiple bunk beds. Hostels often emphasize
the social element with group activities.

Resorts
Resorts range from the humble campground and caravan park to luxurious hotel
complexes catering to guests’ every need. The difference between a hotel and a resort
is the greater availability of external facilities such as recreation areas, private
beaches, parks and so on.

Serviced apartments
A serviced apartment gives guests the comforts of home without having to worry
about cleaning and caretaking. It is a full-sized apartment intended for longer stays
but administered like a hotel room, with laundry, room service etc. provided for the
guest.

Time sharing
In a timeshare arrangement you pay for the exclusive use of a particular
apartment or other lodging but only for part of the year. Time sharing can
be an economical solution for those who wish to stay at the same place
every year.

2: Food and drink

The food and drink sector of the hospitality industry includes places serving fast food at
modest prices to sophisticated restaurants. Pubs, wine and cocktail bars are also part of this
sector. Entertainment establishments are often involved in providing food and drink. In some
cases (such as in the case of a nightclub) food or drink is a major part of the entertainment on
offer, while in others (for example in the case of a cinema) food and drink are additions.

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 Restaurants
Restaurants are among the most obvious examples of the sector. They serve food of
varying quality, with a focus on dining rather than providing snacks. Some restaurants
may also serve alcoholic beverages, particularly wineñ their primary focus is food.

Catering
Catering involves the provision of food and drink at premises other than a restaurant
or other eatery. This might be the client’s home, workplace or another venue such as a
meeting hall or conference centre. Catering ranges from simple sandwiches to
banquets.

Bars & Cafés

Bars focus primarily on providing drinks in a social setting. They may also offer light
meals and entertainment such as televised sports or live music or comedy. Cafés
provide light meals and hot or cold beverages, typically but not always non-alcoholic.

Nightclubs
Nightclubs focus more heavily on entertainment and social engagement than bars or
cafés. Music is typically provided by a DJ but live acts may also perform and there
may be other entertainments as well. Nightclubs typically serve minimal or no food,
focusing on drinks.

Tea and coffee shops

Tea and coffee shops focus on providing hot beverages, often in a quiet and refined
setting. They tend to attract a more mature customer base. As well as tea, coffee and
other drinks, tea and coffee shops may offer snacks such as pastries .

3: Travel and tourism

The travel and tourism sector of the hospitality industry includes businesses that arrange
transport and activities for travelers. This includes everyone from tour operators dealing
largely with those who travel for leisure, to airlines and vehicle rental specialists who serve
both leisure and business clients. In previous eras, these would have been primarily bricks-
and-mortar firms; however, in the digital age, more travel is arranged online and new
business models have evolved in response to this.

Travel agents
Travel agents arrange transport and accommodation for travelers. They are specialist
consultants who work with individual clients to tailor a suitable package, which may
include lodgings, activities such as tours, and travel arrangements such as plane
tickets.

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 Tour operators
Tour operators specialize in arranging tours for their clients. This includes liaising
with venue operators, tour guides and other key organizations and individuals. Tour
operators are not usually involved directly with giving tours — this is the job of a tour
guide.

Online travel agencies (OTA’s)

Playing an increasingly large role in the travel and tourism sector, OTAs perform
many of the services offered by a traditional travel agency via a web-based platform.
Their lower overheads and greater agility allow them to offer competitive prices for
their clients.

Cruises
Cruises combine both transport and accommodation. The purpose of a cruise is to
provide a luxury hotel experience while afloat, combined with travel to exotic and
interesting destinations. Cruises offer activities both onboard and on land, such as
games and musical productions.

Car rental
Car and vehicle rental is an important hospitality sector both for leisure and business.
Vehicles range from chauffeur-driven luxury limousines to budget self-drive options.
Rentals may be required for as little as an hour or two or for extended periods of
weeks or months.

Casinos
Casinos can be exciting destinations, offering games of chance and other
entertainments. Casinos may offer automated slot machines and video games; they
may also include more traditional gaming experiences such as card games or roulette.
Many also offer food and accommodation.

How Has the Corona virus Affected the Hospitality Sector?

The recent corona virus outbreak has hit the hospitality sector particularly hard due to
significant and unheard-of travel restrictions as well as nationwide lockdowns. It therefore
comes as no great surprise that events such as the 2020 Olympics, the UEFA Euro and
the ITB Berlin Travel Trade Show have been postponed indefinitely.

These very same scenarios are reverberating throughout the business community. As
organizations curtail their operations and due to the fact that employees are concerned about
job security, fewer trips are being planned. Of course, those who were hoping to book a
holiday will be curtailing their plans for (at least) the immediate future.

Companies operating in hospitality, like restaurants and hotels are therefore experiencing an
unprecedented drop in occupancy rates; some as high as 90 per cent. This has even forced a

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handful to cease their operations entirely. The main issue is that lower revenue generation has
been compounded with continued operational costs. Owners are therefore being forced to
deal with an entirely unfamiliar situation in regards to obtaining the necessary level of cash
flow in order to remain solvent in such volatile economic times.

Major Players of the Industry

1. Hyatt Hotels Corporation:

Hyatt Hotels Corporation has been operating some of the finest hotels, resorts and
vacation properties since 1957 when it was incorporated in the USA. Its head office is
situated in Chicago and its properties, more than 700 are situated in over 50 countries
of the world.

2. Hilton Hotels and Resorts:

One of the oldest Hospitality sector big players, Hilton Hotels, and Resorts from the
USA completed a century of its successful existence in 2019. It has been registering a
phenomenal growth by operating more than 5,200 hotel properties with more than
856,000 rooms in 105 countries on ownership or management or franchise model.

3. Accor Hotels:

Accor Hotels are the brand name of Accor S.A., a French multinational hospitality
group. Incorporated in 1967 in Paris, France; Accor Hotels has around 4,300 hotels
having a total of 583,161 hotel rooms and presence in 100 countries of the world. It
boasts of deluxe brands of hotels such as Raffles, Sofitel, and Fairmont in
its product portfolio.

4. Wyndham Worldwide Corporation:

Wyndham Worldwide Corporation is US hospitality multinational operating in

segments such as franchising, vacation exchanges, and vacation rentals. Incorporated
as a separate commercial entity from Cendant Corporation in July 2006, Wyndham
Corporation has more than 8,400 hotels and approximately 728,200 rooms in 80
countries.

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 PESTEL ANALYSIS

PESTLE Analysis of Marriott analyses the brand on its business tactics. Marriott PESTLE
Analysis examines the various external factors like political, economic, social, technological
(PEST) which impacts its business along with legal & environmental factors. The PESTLE
Analysis highlights the different extrinsic scenarios which impact the business of the brand.
PESTLE analysis is a framework which is imperative for companies such as Marriott, as it
helps to understand market dynamics & improve its business continuously. PESTLE analysis
is also referred to as PESTEL analysis.

Political Factors:
Marriott has its presence in over 130 countries in the world. In 2017, it expanded its presence
in political stable countries like New Zealand, Finland, Lithuania, Mali and Ukraine. The
acquisition of Starwood Hotels by Marriott in 2016 helped both the chains in bringing down
their operational costs. But Marriott is still unsure whether this will help in increasing their
revenues or not. In the past, Marriott’s revenues have suffered due to the increase in the terror
incidents. The Mumbai terror attack, the Nairobi attack are the few examples of it. Any
terrorist activity if happens, on any of the Hotel chains of Marriott, can cause a serious harm
to brand’s reputation and its customer base and hence revenues. Also, Marriott has existence
in countries where corruption is the norm but they are required to abide by certain laws like
U.S. Foreign Corrupt Practices Act which might make it difficult for them to do business in
that particular nation.

Economic Factors:
Since, Marriott operates in countries outside U.S. as well; the fluctuations in the local
currency will also impact the performance of Marriott. If the dollar becomes stronger as
compared to the local currency, then the hotel will be getting lesser U.S. dollars in exchange
of the local currency. And since there are constant currency fluctuations, it becomes difficult
for Marriott to get an estimate of its assets. Also, a significant chunk of revenue is generated
from U.S. Government spending. The recent cuts and the restrictions put on the spending
have impacted Marriott adversely. And since, Marriott provides mostly Luxury & Premium
services; it can face a decline in revenues in case of an economic slowdown. While its Select
category which provides a homely experience sans charging high rates, might still flourish
during economic downturn.

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Social Factors:
Since hospitality industry is a very competitive industry with Marriott facing competition
from more than 1400 companies in U.S. alone, it is important to provide top – class and
timely services to its customers. Also, customers prefer to associate themselves with brand.
Keeping this in view, Marriott has more than 70% of the rooms in U.S. which are affiliated to
a brand. It is important to have different types of hotels which cater to the needs of different
people. Marriott has categorized its hotels into 3 parts; The Luxury, the Premium and the
Select. Marriott, in order to retain its customers and attract more customers provides a
Loyalty program named ―Marriott Bonvoy‖ which aims to provide its customers with free
hotel stays and additional discounts. Marriott also has a website through which people can
book hotels of their choice at the best deals and packages.

Technological Factors:
The emergence of the third–party service providers is a cause of concern for the hotel chain.
The booking of their hotels through indirect booking channels can increase their overall cost
and hence lead to a decrease in its profitability. Although, the Loyalty Programs schemes
have significantly reduced the impact of these travel booking agents, but Marriott can’t
possibly overlook it. Marriott should also focus on keeping a pace with the technology to
reduce their operational costs and customer retention. There is also a significant need of
laying down an infrastructure which protects the customer’s information and is prone to any
leaks and hacks.

Legal Factors:
The Data Security incident which happened in November 2018 has made Marriott subject to
several lawsuits. The incident led to the disclosure of the personal information of more than
380 million visitors. After this incident, the ICO London sent a notice to Marriott stating that
an investigation will be done on the company’s privacy policy. These sorts of investigations
can lead to hefty fines and penalties. Apart from that it can deteriorate company’s reputation
which can shake its customer’s confidence.

Environmental Factors:
Marriott claims to abide by the different Environmental laws and regulations prevailing in the
countries where it operates. Marriott, in a major step towards sustainability decided to
eliminate the usage of all plastic straws in all its hotels across the globe by July 2019. This
will decrease Plastic Straw’s consumption by 1 billion units. Marriott has been able to
sensitize more than 500000 of its hotel workers regarding the issue of human trafficking.
Marriott’s program ―Serve 360: Doing Good in Every Direction‖ focuses on UN
Sustainability goals like Human rights and reducing carbon footprints etc.
To conclude, the above Marriott PESTLE Analysis highlights the various elements which
impact its business performance. This understanding helps to evaluate the criticality of
external business factors for any brand.
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PORTER'S FIVE FORCE MODEL ANALYSIS OF INDUSTRY

What are Porter Five (5) Forces?

In his revolutionary article - "Five Forces that Shape Strategy", Michael Porter observed
five forces that have significant impact on a firm's profitability in its industry. These five
forces analysis today in business world is also known as -Porter Five Forces Analysis.

The Porter Five 5 Forces are:

1. Threat of New Entrants
2. Bargaining Power of Suppliers
3. Bargaining Power of Buyers
4. Threat from Substitute Products
5. Rivalry among the existing players.

Porter Five Forces is a holistic strategy framework that took strategic decision away from just
analyzing the present competition. Porter Five Forces focuses on - how Marriott
International, Inc. can build a sustainable competitive advantage in Lodging industry.
Managers at Marriott International, Inc. can not only use Porter Five Forces to develop a
strategic position within Lodging industry but also can explore profitable opportunities in
whole Services sector.

1. Threats of New Entrants

New entrants in Lodging brings innovation, new ways of doing things and put pressure on
Marriott International, Inc. through lower pricing strategy, reducing costs, and providing new
value propositions to the customers. Marriott International, Inc. has to manage all these
challenges and build effective barriers to safeguard its competitive edge.

2. Bargaining Power of Suppliers

All most all the companies in the Lodging industry buy their raw material from numerous
suppliers. Suppliers in dominant position can decrease the margins Marriott International,
Inc. can earn in the market. Powerful suppliers in Services sector use their negotiating power
to extract higher prices from the firms in Lodging field. The overall impact of higher supplier
bargaining power is that it lowers the overall profitability of Lodging.

3.Bargaining Power of Buyers

Buyers are often a demanding lot. They want to buy the best offerings available by paying the
minimum price as possible. This put pressure on Marriott International, Inc. profitability in
the long run. The smaller and more powerful the customer base is of Marriott International,

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Inc. the higher the bargaining power of the customers and higher their ability to seek
increasing discounts and offers.

4. Threats of Substitute Products or Services:

When a new product or service meets a similar customer needs in different ways, industry
profitability suffers. For example services like Drop box and Google Drive are substitute to
storage hardware drives. The threat of a substitute product or service is high if it offers a
value proposition that is uniquely different from present offerings of the industry.

5. Rivalry among the Existing Competitors:

If the rivalry among the existing players in an industry is intense then it will drive down
prices and decrease the overall profitability of the industry. Marriott International, Inc.
operates in a very competitive Lodging industry. This competition does take toll on the
overall long term profitability of the organization.

Implications of Porter Five Forces on Marriott International, Inc.

By analyzing all the five competitive forces Marriott International, Inc. strategists can gain a
complete picture of what impacts the profitability of the organization in Lodging industry.
They can identify game changing trends early on and can swiftly respond to exploit the
emerging opportunity. By understanding the Porter Five Forces in great detail Marriott
International, Inc.’s managers can shape those forces in their favor.

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 LEARNING FROM INTERNSHIP

 My intake from this internship is that I got to learn beyond classroom.

 First hand, about the Hotel’s operations, the way it functions.
 It made me learn about the industry from the ground up.
 I now know that the hospitality industry has a way broader spectrum involving
various sectors.
 The industry is people-oriented, where you need to focus on their needs and cater
accordingly.
 The industry is filled with dynamics of the sort that challenges you with different
settings and environment.
 It is a global industry where you are able to develop yourself and get a practical
exposure about the industry from an employee’s perspective.

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 CONCLUSION

Marriott International all about the customer experience; striving for the best and highest is
there main goal. By making the guests feel at home it resulted in a huge international name in
the lodging business over the years. Marriott has different kind of hotels with all different
styles. All of the brands have the same concept, but they are specified to places and target
group and that is what makes it strong. Every Marriott brand has a different price. That's
because the different brands want to attract different people. Although it hails a different kind
of guest, because of the fact that an American guest has not the same needs as a European or
Dutch guest, the Marriott is good in adjusting and getting the best result out of it.

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