PESTEL Analysis of Marriott International, Inc. (MAR).

Introduction

Marriott International, Inc. (MAR) is a multinational hospitality company that operates hundreds of hotels and resorts across the globe. The company has a reputation for providing top-notch customer service, luxurious accommodations, and exceptional amenities. However, like any other company, Marriott International faces various external and internal factors that affect its operations. One of the efficient ways to evaluate the external factors that impact the performance of a business is through a PESTLE analysis. This type of analysis allows companies to evaluate the Political, Economic, Sociocultural, Technological, Legal, and Environmental factors that influence their business practices. In this chapter of our series on PESTLE analysis of Marriott International, we will highlight the various political factors that affect the company. Understanding these factors is critical for any investor or business owner who wants to invest or partner with Marriott International. So, let's dive in and explore the political factors that impact the business operations of Marriott International.

Political factors

The political factors that affect Marriott International, Inc. (MAR) include government stability, foreign policy, labor laws, and taxation policies. One of the primary concerns for Marriott is government stability. Any instability in the government can lead to abrupt policy changes that might affect the business operations of the company in that country.

Marriott operates in several countries, which exposes it to varying foreign policies. The company has to ensure compliance with different laws and regulations that govern its operations in each country.

The company also has to comply with various labor laws, such as minimum wage requirements, employee benefits, and immigration laws. These laws can have a significant impact on the company's operations and financial performance.

In addition to labor laws, Marriott has to comply with taxation policies in the countries it operates in. Taxation policies can have a significant impact on the company's profitability as it will determine the amount of tax the company has to pay on its profits.

• Government stability
• Foreign policy
• Labor laws
• Taxation policies

Economic factors

1. Exchange rates: Exchange rates can have a significant impact on Marriott's business. As a global company, Marriott operates in multiple countries and any fluctuation in exchange rates can impact their revenues and profits. 2. Economic growth: Economic growth has been a crucial factor for Marriott's expansion plans. In countries where the economy is growing, there is a higher demand for hotel rooms. Marriott's expansion into emerging markets is evidence of the importance of economic growth. 3. Labor costs: Labor costs can impact Marriott's profitability. In countries where labor costs are high, Marriott may struggle to offer competitive prices without affecting profits. 4. Tax policies: Marriott operates in countries with different tax policies. Changes in tax policies can impact Marriott's operations in those countries, including their profitability. 5. Interest rates: Interest rates can impact Marriott's borrowing power. High-interest rates can make it challenging for Marriott to borrow money, which can impact their expansion plans. 6. Inflation: Inflation can impact Marriott's operations and profitability. Inflation can make it harder for Marriott to offer competitive prices without affecting their bottom line. Overall, economic factors play a critical role in Marriott's business. Marriott closely monitors these factors to ensure the company remains profitable and can continue to grow in both established and emerging markets.

Social factors

The social factors that affect Marriott International, Inc. include changes in lifestyle and demographics that can impact customer preferences and behavior. The company pays close attention to social trends and changes in consumer behavior to ensure its services and accommodations meet the needs and preferences of their target market.

• Diversity and inclusion: Marriott International, Inc. recognizes the importance of diversity and inclusion in the hospitality industry. The company actively promotes diversity in its workforce, with a focus on hiring and promoting employees from diverse backgrounds. This commitment to diversity and inclusion is evident in Marriott's reputation as an employer of choice among various communities.
• Rise of the sharing economy: The rise of sharing economy platforms such as Airbnb and HomeAway are making an impact on the hotel industry. While Marriott has been relatively unaffected by these sharing platforms, it can't be ignored that consumers are now presented with alternative accommodation options outside of traditional hotels. Marriott knows that in order to combat this trend, they need to continue innovating and providing unique and personalized guest experiences.
• Shift towards experience-based travel: Modern travelers are looking for more experiential travel with personalized touches. They're no longer satisfied with just a comfortable bed and basic amenities. Marriott has recognized this shift and has been investing in creating unique and memorable guest experiences by amplifying their 'Experience' brands such as Marriott Moments and Sheraton Store.
• Changing dining habits and preferences: There's been a noticeable shift in consumer dining habits with a push towards more plant-based food and healthy eating options. Responding to customer preferences, Marriott International has integrated various healthy eating menus throughout its hotels and is committed to sourcing food sustainably to minimize their footprint on the environment.

Technological Factors

Technology is a significant factor that impacts the hospitality industry. Marriott International, Inc. (MAR) has been at the forefront of embracing technology to improve customer satisfaction and streamline its operations.

• Mobile Technology: Marriott International has been investing in mobile technology to enhance the guest experience. The company has developed the Marriott mobile app, which allows guests to make reservations, check-in, and order room service using their mobile devices. Marriott has also implemented mobile check-in kiosks in some of its hotels to improve the check-in process.
• High-Speed Internet: Marriott International has recognized the importance of providing high-speed internet to its guests. The company has invested heavily in upgrading its Wi-Fi infrastructure to provide reliable, high-speed internet connectivity to its guests.
• Data Analytics: Marriott International has been using data analytics to gain insights into guest preferences and behavior. The company uses this data to tailor its services and offerings to meet the needs of its guests better.
• Smart Room Technology: Marriott International is experimenting with smart room technology in some of its hotels. These rooms are equipped with the latest technology, such as voice-activated assistants, smart lighting, and temperature controls, to improve the guest experience.
• Virtual Reality: Marriott International has partnered with Samsung to develop virtual reality travel experiences for its guests. This technology allows guests to experience different destinations before booking their trips.

Overall, Marriott International has been successful in leveraging technology to improve the customer experience and gain a competitive advantage in the hospitality industry.

Legal Factors

Legal factors refer to the laws and regulations that influence the operations of businesses. Marriott International, Inc. (MAR) operates in various countries around the world and must comply with the respective legal frameworks in those regions. Some of the legal factors that may affect MAR include:

• Labor laws: Marriott must abide by laws that govern employment practices, including minimum wage, working hours, and benefits. Violating these laws can lead to financial penalties and legal action against the company.
• Tax laws: Marriott must pay taxes in the countries where it operates. It must also comply with tax regulations on issues such as transfer pricing, where tax authorities scrutinize multinational companies' pricing policies between different entities.
• Data protection and privacy laws: According to Marriott, the company continuously strives to ensure its customers' data is safe and secure. The company must comply with data protection and privacy laws, such as the General Data Protection Regulation (GDPR) in the European Union.
• Intellectual property laws: Marriott must protect its intellectual property, including trademarks, logos, and patents. In some cases, Marriott may also need to obtain licenses or permissions from the relevant authorities to operate its various business operations.

Violating legal regulations can have a severe impact on Marriott's operations, including legal action against the company, fines, loss of reputation, and even bankruptcy. Therefore, it is essential that Marriott closely monitors changes in legal frameworks in the regions where it operates and maintains compliance to avoid legal problems.

Environmental factors

Marriott International, Inc. (MAR) operates in a highly regulated industry that is sensitive to environmental factors. The company is committed to reducing its environmental impact through various initiatives that include:

• Sustainability: Marriott International, Inc. (MAR) has made a commitment to sustainability by implementing various initiatives to reduce its environmental impact. The company has a goal of reducing its water usage by 20% by 2020 and reducing its carbon footprint by 30% by 2025.
• Green buildings: Marriott International, Inc. (MAR) has made a commitment to building green hotels, which are designed to be energy-efficient and environmentally friendly. The company has over 200 LEED-certified hotels that meet high environmental standards.
• Waste reduction: Marriott International, Inc. (MAR) has implemented various programs to reduce waste, such as recycling programs and the use of biodegradable products. The company has also implemented a food waste reduction program to reduce food waste in its hotels.
• Energy conservation: Marriott International, Inc. (MAR) has implemented various energy conservation initiatives to reduce its energy consumption. The company has installed energy-efficient lighting and HVAC systems in its hotels, and it has also implemented an energy-saving program that encourages guests to conserve energy during their stay.
• Environmental compliance: Marriott International, Inc. (MAR) operates in compliance with all environmental laws and regulations in the countries where it operates. The company also has an environmental management system in place to ensure that it meets its environmental goals and objectives.

Overall, Marriott International, Inc. (MAR) is committed to reducing its environmental impact through various initiatives that include sustainability, green buildings, waste reduction, energy conservation, and environmental compliance.

Conclusion

After conducting a thorough PESTLE analysis of Marriott International, Inc. (MAR), it is clear that the company has a strong foothold in the hospitality industry. While there are certain external factors that could pose challenges to the company's growth in the future, Marriott has demonstrated an ability to anticipate and navigate changes in the industry, as well as adapt to shifts in consumer preferences. One of the key strengths of Marriott is its commitment to sustainability and social responsibility, as evidenced by its extensive green initiatives and community engagement initiatives. Additionally, the company has established a strong presence in emerging markets, which provides significant opportunities for growth as well as a diversification of revenue streams. However, it is important to note that Marriott will face challenges in the coming years, particularly in the areas of political instability and regulatory changes. Increased competition from alternative lodging options, such as Airbnb, may also pose a threat to the company's market share. Overall, Marriott International, Inc. (MAR) appears well-positioned to continue its success in the hospitality industry, provided it remains vigilant in anticipating and responding to changes in both the external environment and the evolving needs and preferences of its customers.