In the Hotel Industry, Digital Has Made Itself Right at Home

Changing from a traditional to a digital business model altered Marriott’s culture in unexpected ways.

Companies in multiple industries are discovering the hard way that doing business digitally isn’t an “add technology and stir” proposition. To succeed in digital business means making fundamental changes to how you do business — not just how you reach or serve customers, but how you identify competitive markets and allocate funds.

Marriott International Inc.’s senior vice president of digital, George Corbin, knows this all too well. “For any company that is being disrupted by digital, it’s important that they not just be able to recognize if there’s a potential threat to its existing business; the bigger challenge is, how and what do you change to make the transition from where it is to where it needs to be?” he said in a recent interview with MIT Sloan Management Review’s Digital Business guest editor, Gerald C. Kane.

MIT Sloan Management Review: How are digital technologies changing the way business is done at Marriott?

In just about every way imaginable. I’ve been here for 14 years, and I’ve seen the travel industry continue to be disrupted by digital. In the first wave, the advent of sites like Expedia, Travelocity, and others changed the consumer purchase experience from one conducted through hotel call centers or offline travel agents to one that uses OTAs [online travel agents] and third parties.

These sites were a major disruption to the hotel industry, as bookings and transactions through these new third parties were substantially more costly to us than booking through our own direct channels.

That prompted the development of our own digital channels to reach the consumer directly., obviously, was the first one for us. After that, we began to take advantage of the advent of search engines, which drove a change in terms of thinking about how we could get visibility farther up the consumer purchase funnel.

A whole series of new strategies and tactics had to be employed to win consumers at the early stages of consideration and evaluation. We had to teach thousands of our hotels that you need to publish the right content on our web platform in order to be found by Google. If you don’t, that sale is either going to be lost entirely, or go to a third party where it’s going to cost you much more for that same booking.

The massive consumer shift to mobile is another major disruption.

Source From: MITSloan Management Review