Marriott International, Inc. (MAR): Business Model Canvas [11-2024 Updated]

Marriott International, Inc. (MAR) stands as a titan in the hospitality industry, renowned for its robust business model that effectively combines strategic partnerships, diverse customer segments, and innovative service offerings. Explore how Marriott's unique approach to hotel management, brand loyalty, and customer engagement not only enhances guest experiences but also drives significant revenue streams. Discover the key components of Marriott’s Business Model Canvas below.

Marriott International, Inc. (MAR) - Business Model: Key Partnerships

Collaborations with hotel owners and property developers

Marriott International has established a robust partnership model with hotel owners and property developers. As of September 30, 2024, Marriott operates approximately 9,068 properties globally, with 1,999 managed hotels and 6,888 franchised hotels . The company's development pipeline includes around 585,000 rooms, with 220,000 rooms under construction . This extensive collaboration allows Marriott to expand its brand presence while minimizing capital expenditure risks associated with property ownership.

Partnership Type	Number of Properties	Rooms in Development	Percentage of Pipeline Under Construction
Managed	1,999	220,000	38%
Franchised	6,888	Not Specified	Not Specified
Total	9,068	585,000	38%

Strategic alliances with travel agencies and online booking platforms

Marriott International actively partners with various travel agencies and online booking platforms to enhance its distribution capabilities. In 2024, the company reported gross fee revenues of $3.8 billion, predominantly driven by franchise fees, which increased by 9% year-over-year, reflecting robust growth in unit numbers and higher average daily rates (ADR). Such strategic alliances are pivotal for Marriott's visibility in the crowded hospitality market.

Partnerships with airlines for loyalty programs

Marriott's loyalty program, Marriott Bonvoy, features partnerships with numerous airlines, enhancing customer retention and value. As of September 30, 2024, the liability for the guest loyalty program amounted to $7.371 billion, indicating a significant commitment to customer loyalty. The program allows members to earn and redeem points for stays and flights, strengthening Marriott's competitive edge in the hospitality sector.

Partnership Type	Airlines	Loyalty Program Liability
Airline Partnerships	Multiple	$7.371 billion

Franchise agreements with independent hotel operators

Franchise agreements represent a significant portion of Marriott's business model. In 2024, franchise fees contributed $2.318 billion to gross revenue, up 9% from the previous year, driven by both unit growth and increased co-branded credit card fees. Such agreements enable Marriott to extend its brand reach while allowing independent operators to leverage the Marriott name and systems.

Franchise Metrics	Franchise Fees (2024)	Growth Rate
Franchise Fees	$2.318 billion	9%

Marriott International, Inc. (MAR) - Business Model: Key Activities

Hotel management and operations

Marriott International manages a diverse portfolio of over 9,068 properties across various segments, including owned, leased, and franchised hotels. As of September 30, 2024, the company operated 1,999 managed properties with a total of 572,731 rooms. Additionally, franchised properties accounted for 6,888 locations with 1,074,361 rooms.

The company reported an increase in net fee revenues in the U.S. and Canada segment, which reached $728 million for the third quarter of 2024, up from $674 million in the same period of 2023. This growth is driven by improved revenue per available room (RevPAR) and occupancy rates, highlighting the effectiveness of its management strategies.

Marketing and brand management

Marriott's marketing efforts focus on strengthening its brand presence globally. The company's gross fee revenues from franchise fees amounted to $812 million in Q3 2024, reflecting a 9% increase from the previous year. This increase is attributed to unit growth, higher RevPAR, and enhanced co-branded credit card fees, which contributed approximately $10 million to the revenue growth in the same quarter.

Furthermore, Marriott's loyalty program remains a critical marketing tool, with a liability for the guest loyalty program at $7,371 million as of September 30, 2024, an increase of $365 million from the previous year. This indicates a growing engagement among members, further driving brand loyalty and repeat business.

Development of new properties

Marriott continues to expand its footprint with a robust development pipeline. As of September 30, 2024, the company had approximately 3,800 hotels and 585,000 rooms in various stages of development. Notably, 220,000 of these rooms, or 38%, are under construction, demonstrating Marriott's commitment to growth.

The company anticipates a net rooms growth of approximately 6.5% for the full year of 2024, reflecting ongoing investment in new properties across its global portfolio. This strategic focus on property development is essential for maintaining market competitiveness and meeting rising consumer demand.

Customer service and guest experience enhancement

Marriott prioritizes customer service and the enhancement of guest experiences through various initiatives. The company reported that its net income for the third quarter of 2024 was $584 million, compared to $752 million in the same period of 2023. Despite a decrease in net income, the focus on guest services remains paramount, as indicated by the company's substantial investment in training and development for staff across its properties.

Additionally, the average daily rate (ADR) for comparable company-operated properties in the U.S. and Canada was reported at $245.46 for Q3 2024, a 2.7% increase year-over-year, reflecting a successful strategy in enhancing perceived value among guests.

Property Type	Number of Properties (as of Sept 30, 2024)	Total Rooms
Managed	1,999	572,731
Franchised	6,888	1,074,361
Owned/Leased	50	13,108
Residential	131	14,400
Total	9,068	1,674,600

Marriott International, Inc. (MAR) - Business Model: Key Resources

Extensive global hotel portfolio

As of September 30, 2024, Marriott International operates a total of 9,068 properties worldwide, which includes:

Ownership Type	Properties	Rooms
Managed	1,999	572,731
Franchised/Licensed/Other	6,888	1,074,361
Owned/Leased	50	13,108
Residential	131	14,400
Total	9,068	1,674,600

This represents a growth of 5% in properties and 6% in rooms compared to the previous year, indicating Marriott's robust expansion strategy.

Strong brand recognition and loyalty programs

Marriott's loyalty program, known as Marriott Bonvoy, has seen significant engagement, with a current liability for guest loyalty program points amounting to $7,371 million as of September 30, 2024, up from $7,006 million at the end of 2023. The program's growth reflects the increasing number of points earned by members, highlighting the importance of brand loyalty in Marriott's business model.

Skilled workforce and management team

Marriott International employs a highly skilled workforce, which is critical for maintaining high service standards across its global portfolio. The company reported net income of $1,920 million for the first nine months of 2024, showcasing the effectiveness of its management team in navigating operational challenges. Additionally, the company has invested in employee training and development programs, ensuring that its workforce remains competitive and capable of delivering exceptional guest experiences.

Advanced technology infrastructure for bookings and operations

Marriott has made significant investments in technology to enhance its booking systems and operational efficiency. In the first nine months of 2024, Marriott reported $13,778 million in cost reimbursement revenue, reflecting the efficiency of its centralized programs. Moreover, the company’s technology expenditures for capital and technology projects amounted to $408 million during the same period. This investment underscores Marriott's commitment to leveraging technology to improve customer experiences and streamline operations.

Marriott International, Inc. (MAR) - Business Model: Value Propositions

Diverse range of hotel brands catering to various market segments

Marriott International operates a portfolio of 30 hotel brands, including luxury brands like The Ritz-Carlton and St. Regis, premium brands such as Marriott Hotels and Sheraton, and select service brands like Courtyard and Fairfield Inn. As of September 30, 2024, Marriott had a total of 9,068 properties globally, with 1,674,600 rooms, representing a 5% increase in properties and a 6% increase in rooms compared to the previous year.

High-quality customer service and guest experiences

Marriott emphasizes high-quality customer service, aiming to provide personalized guest experiences. For the third quarter of 2024, Marriott reported a RevPAR (Revenue per Available Room) of $143.66 worldwide, a 3.4% increase year-over-year. The average daily rate (ADR) reached $202.69, marking a 2.2% rise compared to the same period in 2023. This performance reflects Marriott's commitment to enhancing guest satisfaction through service excellence.

Loyalty rewards program offering exclusive benefits

Marriott's loyalty program, Marriott Bonvoy, had a liability of $7.371 billion as of September 30, 2024, indicating an increase of $365 million from December 31, 2023, due to higher points earned by members. The program offers exclusive benefits, including free nights, room upgrades, and access to special events, which significantly enhance customer loyalty and retention.

Global presence with properties in prime locations

Marriott maintains a strong global presence, with properties located in prime urban and resort destinations. As of September 30, 2024, the company's properties were distributed as follows:

Region	Properties	Rooms
U.S. & Canada	6,090	1,030,074
EMEA	1,198	226,447
Greater China	572	168,692
APEC	606	137,568
Total	9,068	1,674,600

This extensive network allows Marriott to cater to a diverse clientele, enhancing its competitive edge in the hospitality industry.

Marriott International, Inc. (MAR) - Business Model: Customer Relationships

Personalized customer service through trained staff

Marriott International emphasizes personalized customer service as a cornerstone of its customer relationships. The company employs over 140,000 associates worldwide, all trained to provide tailored services to guests. In 2024, Marriott reported a satisfaction score of 87% in guest service interactions, reflecting the effectiveness of its training programs and commitment to customer experience.

Engagement through loyalty programs and exclusive offers

Marriott's loyalty program, Marriott Bonvoy, has over 184 million members as of September 2024, showcasing the brand's ability to engage customers effectively. The loyalty program offers members exclusive benefits such as free nights, room upgrades, and personalized experiences. In the first three quarters of 2024, the loyalty program contributed approximately $2.4 billion in revenue.

Year	Members (millions)	Revenue Contribution from Loyalty Program ($ billions)
2022	157	1.8
2023	172	2.1
2024	184	2.4

Feedback mechanisms for continuous improvement

Marriott utilizes various feedback mechanisms, including post-stay surveys and online reviews, to gather insights from customers. In 2024, the company reported a response rate of 45% on post-stay surveys, with 92% of respondents indicating they would recommend Marriott properties to others. This data informs operational improvements and enhances service delivery.

Digital communication channels for bookings and inquiries

Marriott has invested significantly in digital communication channels, offering a seamless experience for bookings and inquiries. As of 2024, over 60% of reservations are made through digital platforms, including the Marriott app and website. The app has received an average rating of 4.8 out of 5, highlighting its user-friendly interface and functionality.

Marriott International, Inc. (MAR) - Business Model: Channels

Direct bookings via Marriott’s website and mobile app

In 2024, Marriott International reported that approximately 70% of its room nights were booked directly through its website and mobile app. This channel is crucial for maintaining higher margins, as direct bookings typically incur lower commission costs compared to third-party platforms.

Online travel agencies and third-party booking platforms

Marriott partners with various online travel agencies (OTAs) such as Expedia and Booking.com. In 2024, bookings through OTAs accounted for about 25% of total room nights. The company continues to focus on optimizing its presence on these platforms to drive visibility and accessibility.

Travel agents and corporate travel departments

Travel agents and corporate travel departments play a significant role in Marriott's distribution strategy. In 2024, these channels contributed to approximately 5% of the company's total bookings. Marriott maintains relationships with over 40,000 travel agents globally to enhance corporate travel solutions.

Social media and digital marketing campaigns

Marriott has invested heavily in social media and digital marketing to engage potential customers. In 2024, the company allocated around $150 million to digital marketing efforts, which included targeted advertising on platforms like Facebook, Instagram, and Google. The return on investment from these campaigns has shown a 20% increase in engagement and conversion rates compared to the previous year.

Channel	Booking Percentage	Estimated Revenue Contribution (2024)
Direct Bookings (Website & App)	70%	$13.2 billion
Online Travel Agencies	25%	$4.6 billion
Travel Agents & Corporate	5%	$0.9 billion
Social Media & Digital Marketing	N/A	$150 million (marketing spend)

Overall, Marriott's multi-channel distribution strategy leverages both direct and indirect booking methods to maximize reach and revenue. The emphasis on direct bookings continues to enhance profitability, while partnerships with OTAs and travel agents remain essential for market presence.

Marriott International, Inc. (MAR) - Business Model: Customer Segments

Business travelers seeking convenience and amenities

Marriott International caters extensively to business travelers who prioritize convenience and amenities. The company's portfolio includes hotels equipped with essential business services such as high-speed internet, meeting rooms, and business centers. As of September 30, 2024, Marriott operated approximately 1,999 managed properties worldwide, with a total of 572,731 rooms available to meet the needs of this segment.

Leisure travelers looking for luxury and comfort

The leisure travel segment is another critical customer group for Marriott. The company offers a variety of luxurious accommodations across its brands, appealing to travelers seeking comfort and premium experiences. In the third quarter of 2024, Marriott reported a 9.2% increase in Revenue per Available Room (RevPAR) in Europe, reflecting strong demand from leisure travelers. The average daily rate (ADR) for comparable company-operated properties in Europe reached $342.42.

Event planners requiring conference and meeting spaces

Marriott’s extensive facilities and services cater to event planners who require dedicated conference and meeting spaces. The company reported in the third quarter of 2024 that total revenues from event-related services contributed significantly to its overall financial performance. The segment's net fee revenues in the U.S. & Canada alone were $728 million, indicating a healthy demand for such facilities.

Long-term stay guests and vacation ownership customers

Marriott also targets long-term stay guests and vacation ownership customers through its Residence Inn and timeshare offerings. As of September 30, 2024, the company had approximately 585,000 rooms in its development pipeline, with a significant portion designated for extended stays and vacation ownership properties. The company reported gross fee revenues of $3,081 million from its various segments, reflecting the diverse customer base it serves.

Customer Segment	Key Features	Financial Impact (Q3 2024)
Business Travelers	High-speed internet, meeting rooms, business centers	Net fee revenues: $728 million (U.S. & Canada)
Leisure Travelers	Luxury accommodations, premium experiences	RevPAR increase: 9.2% in Europe, ADR: $342.42
Event Planners	Conference and meeting spaces	Significant contribution to overall revenues
Long-term Stay Guests	Extended stay options, vacation ownership	585,000 rooms in development pipeline

Marriott International, Inc. (MAR) - Business Model: Cost Structure

Operational costs including labor and maintenance

Marriott International's operational costs for the third quarter of 2024 included direct expenses related to owned, leased, and other properties amounting to $300 million, up from $293 million in the same quarter of 2023, reflecting a 2% increase. For the nine months ended September 30, 2024, these expenses totaled $882 million, compared to $861 million for the same period in 2023.

General, administrative, and other expenses rose significantly, reaching $276 million in Q3 2024, up from $239 million in Q3 2023, marking a 15% increase. For the nine-month period, these costs amounted to $785 million, compared to $681 million the previous year.

Depreciation, amortization, and other expenses remained relatively stable at $45 million for Q3 2024, slightly down from $46 million in Q3 2023. Year-to-date, these expenses totaled $137 million, compared to $138 million in the prior year.

Marketing and advertising expenses

Marriott's marketing and advertising expenditures are not explicitly detailed in their financial reports. However, the company invests significantly in brand marketing and loyalty programs, which are crucial for maintaining competitive positioning in the hospitality market. For the nine months ending September 30, 2024, Marriott reported $13.778 billion in cost reimbursement revenue, which includes marketing-related expenses reimbursed by franchisees.

Franchise and management fees

Franchise fees for Marriott increased to $812 million in Q3 2024 from $748 million in Q3 2023, marking a 9% increase. For the nine-month period, franchise fees reached $2.318 billion, up from $2.126 billion the previous year, also a 9% increase.

Base management fees rose to $312 million in Q3 2024 from $306 million in Q3 2023. Year-to-date, these fees totaled $955 million, compared to $917 million for the same period in 2023.

Incentive management fees also saw growth, reaching $159 million in Q3 2024, compared to $143 million in the same quarter of 2023, which is an 11% increase. For the nine months ended September 30, 2024, these fees totaled $563 million, up from $537 million in 2023.

Technology and infrastructure investments

Marriott has continuously invested in technology and infrastructure to enhance operational efficiency and guest experience. In the first three quarters of 2024, the company reported capital and technology expenditures of $408 million, an increase from $318 million in the same period of 2023.

The company is also focusing on technology enhancements to support its loyalty program, which represents a significant liability of $7.371 billion as of September 30, 2024, reflecting an increase from $7.006 billion at the end of 2023.

Cost Category	Q3 2024 ($ millions)	Q3 2023 ($ millions)	Change (%)	YTD 2024 ($ millions)	YTD 2023 ($ millions)	Change (%)
Operational Costs	300	293	2%	882	861	2%
General, Administrative & Other	276	239	15%	785	681	15%
Depreciation & Amortization	45	46	-2%	137	138	-1%
Franchise Fees	812	748	9%	2,318	2,126	9%
Base Management Fees	312	306	2%	955	917	4%
Incentive Management Fees	159	143	11%	563	537	5%
Capital & Technology Expenditures	-	-	-	408	318	28%

Marriott International, Inc. (MAR) - Business Model: Revenue Streams

Management and franchise fees from hotel operators

In the first three quarters of 2024, Marriott International reported gross fee revenues of $3,081 million, which includes base management fees of $955 million, franchise fees of $2,318 million, and incentive management fees of $563 million. This represents an increase of 9% in franchise fees compared to the same period in 2023, driven primarily by unit growth and higher revenue per available room (RevPAR).

Revenue Type	Q3 2024 (in millions)	Q3 2023 (in millions)	Change (%)
Base Management Fees	312	306	2%
Franchise Fees	812	748	9%
Incentive Management Fees	159	143	11%
Gross Fee Revenues	1,283	1,197	7%

Room revenue from owned and leased properties

Marriott's owned, leased, and other revenue reached $1,133 million in the first three quarters of 2024, reflecting a 2% increase from $1,109 million in the same period in 2023. This revenue stream is vital as it accounts for a significant portion of the company's overall earnings.

During Q3 2024, room revenue from owned and leased properties amounted to $381 million, up from $363 million in Q3 2023, marking a 5% increase.

Revenue Type	Q3 2024 (in millions)	Q3 2023 (in millions)	Change (%)
Owned, Leased, and Other Revenue	381	363	5%
Direct Expenses	300	293	2%
Net Revenue	81	70	16%

Loyalty program partnerships and co-branded credit card fees

Marriott's loyalty program significantly contributes to its revenue streams, with co-branded credit card fees accounting for $10 million in Q3 2024, and $38 million for the first three quarters. The total liability for the guest loyalty program was $7,371 million as of September 30, 2024, an increase of $365 million from December 31, 2023.

Ancillary services such as food and beverage sales and event hosting

Ancillary services, including food and beverage sales and event hosting, are crucial for Marriott's revenue generation. In the first three quarters of 2024, the company reported total revenues of $18,671 million, which includes substantial contributions from these services. The revenue from food and beverage sales continues to show strong performance, although specific figures were not disclosed in the latest financial reports.

Revenue Source	Q3 2024 (in millions)	Q3 2023 (in millions)	Change (%)
Total Revenue	6,255	5,928	5%
Ancillary Services (Estimated)	N/A	N/A	N/A

Updated on 16 Nov 2024

Resources:

1. Marriott International, Inc. (MAR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Marriott International, Inc. (MAR)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Marriott International, Inc. (MAR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.