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PESTEL ANALYSIS FOR MARRIOTT INTERNATIONAL BY ABRAHAM OKEWUMI

Brief Profile

Marriott International is a leading global hospitality company offering a diverse portfolio of brands and
accommodations across various price points and markets. The company, founded in 1927 by J. Willard and
Alice Marriott, has become one of the world’s largest hotel chains.
It operates, franchises, and licenses hotels, residential and timeshare properties under several luxury,
premium, and select brand names. Marriott offers accommodation, hotel reservations, timeshare vacations,
flight and hotel packages, and car rental services. The company’s operations span North America, Europe,
Africa, the Middle East, Asia-Pacific, Caribbean, and Latin America. Marriott is headquartered in Bethesda,
Maryland, the US.
According to Statista, in 2022, the number of Marriott International hotels worldwide exceeded eight
thousand and a significant portion of these units were located outside of the United States.
INTRODUCTION
When appraising the external environment of the organization you will typically start with its
general environment. But what does this mean? The general environment is composed of
dimensions in the broader society that influence an industry and the firms within it. (Fahey, 1999;
Walters & Priem, 1999). PESTEL analysis is a valuable tool for assessing the various external
factors that can impact a company's performance and success. By examining political, economic,
social, technological, environmental, and legal factors, businesses can gain insights into the
opportunities and threats present in their operating environment. This analysis enables informed
decision-making and strategic planning, allowing companies to adapt to changes and capitalize
on emerging trends. Ultimately, leveraging the findings of a PESTEL analysis helps
organizations stay competitive and achieve long-term success. In this project, we will analyze the
PESTEL composition of Marriott International.
POLITICAL DIMENSION
Marriott operates in numerous countries, and the political stability of each country affects its operations. Political
stability is essential for international hotel business. It allows hotel chains to operate in a predictable and safe
environment, which is necessary for investment and growth. When there is political instability, it can lead to a
number of negative consequences. For example, political instability can deter tourists from visiting a country,
which can lead to a decline in demand. It can also increase the costs of operations, such as the cost of security
measures and insurance premiums. In some cases, political instability can even lead to Marriott having to close
its hotels in a country. For example, in 2022, Marriott was forced to close some of its hotels in Ukraine
following the Russian invasion. On the other hand, stable governments are typically more conducive to
business operations.
Taxation Policies: Changes in taxation policies, such as increases in hotel or tourist taxes, can impact Marriott’s
profitability. Tax incentives can make some regions more attractive for expansion or investment.
Foreign Direct Investment (FDI) Policies: Countries with friendly FDI policies can make it easier for Marriott
to invest and set up hotels. Restrictions on FDI might limit Marriott’s ability to expand in certain regions.
ECONOMIC DIMENSION
Currency exchange rate: Marriott International runs a truly global business with hotel, residential, timeshare, and
other lodging properties in 138 countries and territories under 30 brand names. Accordingly, changes in currency
exchange rates are going to affect the profits of the hotel chain. A weak US dollar can make hotels more
affordable for international travelers, which can lead to increased demand for the company’s services. For
example, in 2020, the US dollar weakened significantly against a number of other currencies, such as the euro
and the Japanese yen. This made Marriott’s hotels more affordable for travelers from these countries, and the
company saw an increase in demand for its services. A strong US dollar, on the other hand, can make Marriott’s
hotels more expensive for international travelers with negative implications on the level of demand. This was the
case in 2015, when the US dollar strengthened significantly against a number of other currencies and decreased
profits for Marriott from international markets.
The inflation rate varies among the countries where Marriott operates, which consequently affects the spending
power of both existing and potential customers, thereby impacting the business revenue.
SOCIAL DIMENSION
Following are the social factors impacting Marriott PESTLE Analysis:
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.
 TECHNOLOGY DIMENSION
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.
In their Q4 meeting in 2023,Marriott’s president and CEO, Tony Capuano, said: "Product innovation
and engagement with our members remain key focus areas, especially through investments in our
Marriott Bonvoy app and other digital products.“ "We have made great gains in contributions from our
digital platforms, which are highly profitable channels for our owners and anticipate many additional
enhancements over the next couple of years. In 2022, our mobile app users were up 32% year-over-
year, digital room nights rose 27%, and digital revenues climbed 41%.“- he added
ENVIROMENTAL DIMENSION
In the Marriott PESTLE Analysis, the environmental elements affecting its business are as below:

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.
Climate resiliency remains a key component of Marriott’s sustainability strategy, including our
commitment to set a near-term science-based emissions-reduction target (SBT) and a long-term target
to reach net-zero value chain greenhouse gas (GHG) emissions by no later than 2050.According to
the CEO in a newsletter, they are currently preparing our SBT and net-zero targets for submission
and are developing in-depth climate execution strategies with leadership teams across the globe.
LEGAL DIMENSION
Following are the legal factors in the Marriott PESTLE Analysis:
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.
Aside from this, Marriott International must adhere to labor laws governing minimum wage, working hours, employee
rights, benefits, and employee classification. The company is responsible for providing a safe workplace, preventing
discrimination, and upholding fair labor practices. Compliance with intellectual property laws requires Marriott
International to protect trademarks, copyrights, patents, and trade secrets. The company must safeguard its brand identity,
original works, innovative products, and confidential information from unauthorized use or disclosure.
Marriott International may take legal action against individuals or entities that infringe upon its intellectual property rights
to enforce these protections.

01
GLOBAL PRESENCE AND MARKET
LEADERSHIP: Global operations and
presence not only increases revenues but
also spreads the risk. If one revenue from
one region decline, the company can rely
on the other regions. Marriott operates
across 127 countries and territories
globally. Marriott is the largest hotel chain
globally with over 30 brands, 81 hotels,
and $25.1 billion in assets under its
impressive portfolio and 6,500 properties
offering over 1.2 million rooms across the
globe. Being the largest ensures it enjoys
the full benefits of economies of scale.
CONCLUSION
02
STRATEGIC PARTNERSHIPS AND
PROFITABLE ACQUISITIONS : Marriott
partners with some of the biggest players in
different sectors, which has enabled the
company to undercut the competition. It
recently partnered with Alibaba to enable
millions of customers to book directly without
deposits. On the note of profitable
acquisitions, From Ritz Carlton to Starwood,
resorts worldwide, Bulgari hotel, and gaylord,
Marriott has expanded its portfolio, revenues,
and profits through the acquisition of highly
profitable brands.
03
CUSTOMER EXPERIENCE QUALITY: A
section Marriott's customers will not even
consider switching to any other hotel. The
company has nurtured one of the most loyal
customers using a combination of strategies,
including one of the largest loyalty programs.
Strict code of conduct: the hotel service
business is highly sensitive to a wide range of
issues. From cleanliness to etiquette and
punctuality in service delivery, Marriott's strict
code of conduct ensures delivery of all these
ingredients of success.
References
 bstrategyhub. (n.d.). Marriott SWOT Analysis. Retrieved from
https://bstrategyhub.com/marriot-swot-analysis/
 MBA Skool. (n.d.). PESTLE Analysis of Marriott. Retrieved from
https://www.mbaskool.com/pestle-analysis/companies/17988-
marriott.html#google_vignette