Event Management Business Plan For Marriott Hotel Completed by: YOUR Name University of Outline 1. Abstract 2. Marriott’s strategy 3. Marriott’s business analysis: major trends 4. Goals and actions’ plan 5. Business strategy communication and summary 6. Bibliography Abstract This paper provides an in-depth view on the Event Management Business Plan for Marriott International Inc. The work comprises the following sections: * Step 1: Identifying the Strategy * Step 2: Analyzing Marriott Corporation and Identifying Major Trends * Step 3: Outlining Marriott’s Goals and Objectives * Step 4: Providing Summary of the Depicted Business strategy and Communicating Results of the Work We used various Internet and printed sources while constructing this study. The main focus of this assignment was to provide the comprehensive analysis of the Marriott Corporation and outline possible ways of its future development and event management. I. Marriot’s strategy According to the company’s official website and printed publications, Marriott International, Inc., is one of the leading worldwide hospitality organizations. It was established in Washington DC, in 1927 by J. Willard and Alice S. Marriott. Nowadays, Marriott Corporation has more than 2,700 accommodation properties located in the United States and 65 other countries and territories. Marriott International is a major global hospitality organization with over 2,600 operating units. The Corporation operates under 16 different brands. For many years, Marriott Corporation has been one of the most profitable firms in each of its product lines--hotels, airline food service, business food service, family dining, and contract services. Its historical key to success rests in being the "preferred provider," the provider customers think of first when making lodging or food choices. At a recent management planning meeting, Marriott decided that a second component was necessary for continued success. Along with being the "provider of choice," the firm also had to become the "employer of choice." If Marriott could not continue to attract and manage high quality people, its historically rapid growth would slow. As the provider of choice, competitors include Hilton, Hyatt, Sheraton; as the employer of choice, competitors began to include Sears, McDonalds, and the U.S. Army. For Marriott Corporation, managing employees and becoming the employer of choice is not an option; it is central to business success. Managers at all levels have just as great a commitment to customer service as they do to attracting, retaining, and motivating high quality employees. To become the preferred employer, Marriott executives have worked to broaden their employee supply pool (e.g., hire mature adults and form relationships with schools and community organizations). To retain employees, Marriott executives have worked to clarify career alternatives, form autonomous work teams, and empower employees. To continue to motivate employees, executives have modified reward systems, expanded job responsibilities, and shared power. In brief, Marriott executives leveraged their HR practices to become the employer of choice, provider of choice, and ultimately, to become more competitive. Marriott is an upscale hotel that competes with Hyatt and Stouffer hotels. Although Marriott may have overextended itself in the 1980s, its performance continues to improve more rapidly than that of its direct competition. An important factor in the success of Marriott has been the effective management of its financial assets. Occupancy rates were identified that were needed to cover construction costs and established as goals. A second important factor in Marriott's success is the ability to provide total customer satisfaction. Concierge service, video checkout, frequent-flier points, weekend rates, and the administration of customer surveys to identify customer needs and wants were all elements of a successful service approach. A third reason for success has been effective leadership and the ability to know when to change. Finally, the development of a successful strategy of market segmentation has focused resources and promoted a loyal customer base. Marriott was a fast-growing organization until it was overturn??
by a declining real estate market, an oversupply of hotel rooms, and a lingering recession. Profits tumbled by half between 1989 and 1992, and Marriott was devastated by $3.6 billion in debt. A controversial plan to split the company into two parts--one a profitable hotel and food-service business, and the other a debt-laden owner of depressed real estate--proved successful. Another strategy that proved successful was to accelerate franchising hotels. In 1989, 21 percent of hotels were franchised, and by 1993, 27 percent were franchised and plans were formulated to franchise 50 percent by 1997. Marriott avoided the risk of a loss of quality by selecting franchisees with the same philosophy about quality and by quickly withdrawing a franchise if standards are lowered in any way. Marriott also has a product in every price category: the high-end J. W. Marriott, business-class Marriott, moderate Courtyard by Marriott, budget-priced Fairfield Inns, and suite hotels. Moreover, Marriott has invested heavily in the burgeoning retirement accommodation business. Marriott, like Wal-Mart, Mary Kay, and Home Depot, is heavily dependent on a single individual for leadership. Bill Marriott inherited the business from his father and has made many important changes. Bill Marriott, like Sam Walton of Wal-Mart did, closely monitors expenses. One of Marriott's most admired financial strategies is to design, build, and manage its hotels but not to own them. Although each manager has a fair degree of autonomy over operating costs and pricing, there are literally a dozen encyclopedia volumes concerning task performance. For example, maids follow a 66-point guide to making up bedrooms, and guidelines cannot be changed without headquarters’ approval. II. Marriott’s business analysis: major trends Another aspect of Marriott is its corporate cultural guidelines. These cultural guidelines are not necessarily similar to Mary Kay, but, nonetheless, they are clear and distinct and evolved from the Marriott ethic. The Marriotts are a Mormon family, workaholic and devout. The Book of Mormon is placed in Marriott hotel rooms along with the Gideon Bible and a biography of the founder. The cultural guidelines range from the development of team spirit to the management of time and to personal habits relating to physical fitness and spiritual commitment. After financial or strategic plans have been specified, Marriott has shifted to building commitment among people in the organization. The major change, and the most difficult, has been the development of new operating cultures that are required to succeed in new markets. None of Marriott's traditions appear sacred at the Courtyard division. Even the all-cotton towels, a tradition of Marriott's hotel chain, have been replaced with cheaper fabric. The biography of the company founder, offered for free at Marriott hotels, is sold at Courtyard vending machines. These cultural changes were also implemented at other hotel divisions aimed at serving different target markets. The company is attempting to operate the smaller, less complicated hotels with managers who have less experience than its traditional managers. Another deviation from tradition is to hire managers from competing chains rather than from within the Marriott organization. Marriott competed on the strong organizational capability to change. Marriott hotels competed directly with such firms as Hilton, Hyatt, Four Seasons, and Sheraton. Although many strategies were similar, Marriott tried to serve its clientele better. Marriott focused on becoming an employer of choice, and this meant competing with indirect competitors such as McDonald's, Burger King, Sears, and other organizations that hire large numbers of employees from the traditional applicant pool. To compete, Marriott has tried to become a more attractive employer. Marriott began by focusing its resources on food with its Hot Shoppe restaurants and by serving airlines with food. Institutional food service to airlines, hospitals, airports, schools, and business organizations became an integral part of its business. Marriott also offers a product portfolio ranging from luxurious accommodations (Marriott Suites) to traditional rooms (Marriott) to lodging for family vacationers (Residence Inn), business travelers (Courtyard), and those desiring economy (Fairfield Inn).
This product portfolio has contributed to the Marriott success story. Marriott’s Competitors The largest hotel chains based on number of rooms are Holiday Inn Worldwide, Choice Hotels International, Best Western International, Marriott, Hospitality Franchise Systems, Days Inn of America, Hilton Hotels, ITT Sheraton, Motel 6, and Promus. The largest hotel chains based on number of units are Best Western, Choice Hotels International, Holiday Inn Worldwide, and Days Inns of America. The fastest-growing hotel/motel chains are Motel 6, Howard Johnson Inns, Comfort Inns, and Hampton Inns. Holiday Inn Worldwide and Best Western International dominate market share among hotel and motel franchise companies. Choice Hotels International administers Comfort Inns, Quality Inns, Clarion Hotels, House Inns, Sleep Inns, Rodeway Inns, Econo Lodges, and Friendship Inns. Marriott controls Residence Inn, Fairfield Inn, and Courtyard. Hospitality Franchise Systems consists of Howard Johnson and Ramada. The Promus Group comprises Embassy Suites, Hampton Inn and Suites, Homewood Suites, and Harrah's. Franchising in the hotel/motel industry has been used extensively. Hotels have used franchising to satisfy the retailing of services to meet the challenges of intangibility, perishability, inseparability, and variability. Labor intensity and quality control are other challenges that franchising has successfully addressed. Demand troubles Fluctuating demand caused by seasonal variations is another facet of the market structure of the hotel industry. To meet this challenge, several ski resorts in appropriate locations have opened their facilities to tour groups during the summer months. Moreover, Marriott hotels have offered weekend rates and discounts to special groups during the off-season. In general, hotel and motel organizations tend to be small, with more than half accounting for no more than three units. Nonetheless, like the rest of the retail industry, large organizations are steadily increasing their market share. This concentration of large organizations such as Marriott International has developed partly because of inter-organizational communication systems, franchised networks, and corporate vertical systems. III. Goals and actions’ plan Marriott manages the hotels under the Marriott name but does not own them. Typically, Marriott builds the hotel and sells it to a group of investors. These investors might be an insurance company, a limited partnership, or a real estate investment trust. Marriott manages the property in return for about 5 percent of the hotel's revenues and 20 percent of its operating profits and, in a minority of situations, may franchise some hotel units or may own other units outright. Marriott was one of the most successful hotel operations in the 1980s and continues to outperform the industry in the mid- 1990s due to its good locations, upgraded properties, and strong occupancy. Hotel Market Segmentation A strong and clear hotel image can increase consumer confidence in its lodging and service accommodations. Because the way in which consumers perceive a hotel can influence their reaction to its offerings, management is very concerned with the development of hotel image. Perception of a hotel image is derived not only from functional attributes of price and convenience but also from the influence of architecture, interior design, colors, and advertising. Luxury hotels include Fairmont, Four Seasons, and Westin. Upscale hotels include Hyatt, Lowes Anatle, Marriott, Omni, and Stouffer. In precarious economic times, luxury and upscale hotels can reduce rates to maintain occupancy. Budget hotels cannot readily counter this strategy. Moreover, should a geographic area become overbuilt with hotels, high-price hotels may lower their rates in an effort to limit their losses and keep occupancy from failing below 60 percent. Again, midscale and budget operations would find it difficult to counter this move. Middle upscale hotels include Courtyard by Marriott, Doubletree, Harvey, Hilton, Radisson, Sheraton, and Wyndham. These middle upscale hotels are also able to lower rates in adverse economic environments. Many of these hotels find it profitable to cooperate with such organizations as the American Association of Retired Persons and the Automobile Association of America in offering discounts during off-season periods or during adverse economic periods.
All-suite middle upscale hotels include AmeriSuites (Howard Johnson), Embassy, Guest Quarters, Hawthorne, Homewood, Lexington, and Residence Inn by Marriott. Both Howard Johnson and Marriott have diversified by serving different target markets that desire longer stays and more residential facilities and services than ordinary travelers. Full-service midscale hotels include Best Western, Howard Johnson, Holiday Inns, Quality Inns, and Ramada. Limited-service midscale hotels include Drury, Hampton, and LaQuinta Motor Inns. Both Holiday Express and Ramada Limited have been expanding quickly, but this is a market that can become oversaturated rapidly. Limited-service midscale hotels will probably increase total market share since the potential is present, but individual hotel shakeouts may occur along the way. Plans and goals of development We offer the following policy recommendation on how to make the Marriott’s current policies and procedures a driving force within an Event Management Business Plan: Recommendation One The CEO and senior managers will make a strategic training plan an essential part of the business' overall strategic plan. This includes both a long-term and short-term training plan. Recommendation Two The vice president responsible for training and education will have an active role in formulating these business strategies. Recommendation Three These business strategies will embrace the three essential elements of the Work Force Education Triad: 1. Skills 2. Training 3. Education. Recommendation Four The CEO will monitor the results of these strategic training plans to ascertain: a. that all employees are involved b. that real business and people problems are being addressed c. that a realistic return on investment measurement system is ultimately developed that tracks bottom line results IV. Business strategy communication and summary Next, we propose the IT system implementation that will allow Marriott to improve its operations a well as increase the clientele base as aided by new technologies and the power of Internet communications. The following steps illustrate the procedure of IT program implementation: Step 1: Communicate It begins with communication, but not the type of techno-dialogue that makes manager’s eyes glaze over. Instead, each department executives need to look at the enablers and inhibitors of each proposed project. Then, they have to better market their ideas in language that Marriott’s executives are comfortable with. Corporate managers know their business, which traditionally hasn't been technology. However now Marriott business applications, network infrastructures and the Internet are as strategic to the hotel business as a good marketing plan. Headquarters is recognizing this, but department managers have to get up to technical snuff. Step 2: Construct a Plan We also need a plan. To do this effectively, Marriott has to build teams of business and IT managers to benchmark existing processes. Then the teams will have to construct a "quick-hit" and long-term plan, including resource requirements. During this benchmarking stage, Marriott will be able to find a number of inefficient processes. For example, it may assess its value chain and consider whether any improvements are necessary. Each hotel purchases all of its soaps, shampoos, towels and other consumable goods from its favorite suppliers. Because of dissimilar systems, Marriott may be losing out on volume discounts, products may go to waste and accountability may be spotty. All of these matters have to be checked. Once the baseline is finished, Marriott's IR strategy and planning teams will develop a strategic time line and architectural plan. To have room for the rapid transformation and creation of so many necessary applications, Marriott first will need a more flexible network, which it should target for its quick-hit list. It will also conclude that the most efficient way to build out the new applications will be with reusable object-based applications that would also change quickly with the business. Step 3: Life-Cycle Management Ambitious plans like these also spotlight another huge gap between IT and business: accountability for project delivery.
"Even with some appearance of governance, typically there's no process for performance review and accountability once a project is officially endorsed," comments Ryan Schmelz, managing partner at Transition Partners, an IT management consulting firm in Reston, Va. When projects are commenced with an executive management team, they often fall off the radar, typically because of changes in the business or executive management turnover, Schmelz adds. This, he reveals, results in structures that are often funded long after their usefulness or that are left incomplete. Therefore, IT projects have to be held to the same level of accountability as any business initiative. We propose an "accountability ladder", which is similar to the existing Marriott’s model. At Marriott, accountability is divided between business and technology project managers. Each project begins with an executive sponsor, who chairs a steering committee headed by a business project manager, connected with an Information Resources project manager. Because of such level of enclosure, the technological aspects of new initiatives are fleshed out alongside with the development of new projects. This brings about a more efficient flow of ideas and business development. With such level responsibility, Marriott will be calculating the benefits of IT projects and preparing a system to measure the performance of those applications throughout their life cycles. Marriott Corporation has done a decent job in the past with cost control and project management. However it has had troubles measuring a project's actual benefits. Under the proposed plan initiative, Marriott will construct the most appropriate automated system to measure life-cycle performance of projects. Step 4: Looking Forward As benchmarking labors move ahead, so too do forward-looking proposals like customer relationship management projects that stretch Marriott's sales force automation tool into a platform for a number of interesting functions, such as pre-stay sales of golf or spa packages. In the future, visitors will even be able to book extra services like these or squeeze their itineraries online. Most of these proposals will be commenced by business departments, executive teams and even sales representatives who are likely to get excited about the benefits IT can bring to the business. But all this new expansion will stretch Marriott's IT resources. It will boost the number of people working on IT projects by one-third and will increase IT spending from 5% to 15% per year since 1996. However, the immeasurable benefits of these new policies implementation will be that IR will not have to struggle with ill- defined technology projects or dictate the software development and support for business support systems. IT at Marriott is likely to become a main component of the products and services that the corporation offers to its customers and guests at its locations. Therefore, positive results from the proposed event management plan will be huge.