Marriott International The Next 90 Years Case Solution

The document contains an analysis of the recent change in the lodging industry with the inculcation of OTAs and Home Sharing businesses into the lodging industry. Moreover, it provides an analysis of the impacts of the emergence of these businesses over Marriott International along with the changes made by Marriott International in response to these competitive forces.

2. Emergence of OTAs and Home Sharing Businesses

Online Travel Agencies (OTAs)

The emergence of OTAs due to the rapid increase in the usage of the internet could pose a threat in declining occupancy rates and increasing distribution costs for Marriott International. The OTA business has been growing at a rapid rate with a net change of 3.2% in the occupancy rate through OTA from 2014 t 0 2016 as compared to a change of only 1.4% in the occupancy rate through direct channels for the same period. Various factors are making OTAs, a preferable choice for travelers to book their traveling services including accommodation in hotels. One of the major factors includes the provision of a single platform for booking and evaluating all travel service options by OTA which enables the travelers to save their time and get various alternative options for all services at a single platform.

Moreover, the advertising spending by the OTA business including two major OTA businesses i.e., Expedia and Priceline, are twice as much high as all hotel chains combined. High advertising expenses attract a large number of travelers towards the OTAs for booking their travel services. In this situation, Marriot international has two choices to maintain its occupancy rates. Either it could increase its marketing spending and provide certain benefits like its loyalty programs, or it could provide commission to the OTAs. Both options would increase the operational costs of Marriot