Former President & Chief Executive Officer, Marriott International
Marriott's Sorenson on loyalty integration, innovation
Marriott International President and CEO Arne Sorenson speaks with HNN's Sean McCracken at the Hunter Hotel Conference about the latest developments at Marriott.
About Arne Sorenson
Arne Sorenson, then President and CEO of Marriott International, received the 2020 Humanitarian Lifetime Impact Award from the National Center for Children and Families (NCCF). In his acceptance remarks, Sorenson stated that the COVID-19 pandemic had been "a horrible event for all of humankind" and described its disproportionate impact on those living in poverty. He noted that the organization had remained open during the pandemic to provide essential support services, and he accepted the award on behalf of Marriott's associates, citing the company's legacy of community service. In early 2020, Sorenson discussed Marriott's business strategy and his personal health in interviews at the World Economic Forum in Davos. He described the company's focus on strengthening its loyalty program and expanding into adjacent spaces such as home-sharing and all-inclusive resorts. Regarding the then-emerging coronavirus, Sorenson said it was "still way too early to talk about" and that Chinese authorities needed to understand the situation. He also provided updates on his cancer treatment, stating that he had undergone surgery in November 2019 and felt "very optimistic." In earlier appearances, Sorenson addressed Marriott's data breach, the company's growth plans, and the importance of diversity and inclusion, stating that the company had set targets for workforce diversity and that inclusion should not leave people feeling excluded.
Transcript (15 segments)
✨ AI-enhanced transcript with speaker attribution
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Sean McCracken0:00
Hi, Sean McCracken here with Marriott International President & CEO Arne Sorenson. Arne, how you doing?
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Arne Sorenson0:04
I'm good, thank you. How about you, Sean?
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Sean McCracken0:06
I'm good. So you just spent the past hour pretty much laying out as much of your past as you can get through in an hour. Let's take it a little different tact and be a little forward-looking. So it's been a really active couple of years from Marriott. What's next? I mean, what's next for a company that's been moving as fast as you guys have been?
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Arne Sorenson0:25
Well, there are lots of great things on the horizon. I think this year is really important for us because we're bringing the loyalty programs together, Marriott Rewards and SPG. That will happen the second part of this year. I hope to have a new name to launch those programs very early next year. But that's a really exciting part of the merger, and we obviously got to make sure that we get this merger done and then it works. In the meantime, though, we've got organic growth that's going extraordinarily well. We signed last year more than two hotels a day, and we expect to open numbers sort of comparable to that this year and into the future years. And of course, then we're watching what's happening around the globe, and we still see strong trends in increased travel, particularly in the developing world. We see robust consumer confidence in the United States. So I think business conditions should be good and should carry us through a couple of exciting years ahead.
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Sean McCracken1:17
Now you mentioned the loyalty innovation. Can you give us any glimpse on what that's gonna look like coming out of the other side? I know it's something that people are really, I mean, that's a huge part of the deal and something people are really eager to see come together.
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Arne Sorenson1:32
Well, stay tuned. We will be saying more about this in the near term. But obviously, we've got three communities we want to make sure that we are focused on: the guests being the most important, but we've got our hotel owners as well, and of course Marriott's own involvement in this program. And what we think we can do is deliver even more value to our guests, at more cost-effective terms to our hotel owners, and drive a loyalty program which is second to none.
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Sean McCracken2:02
And you've mentioned before that you've heard pretty vocal SPG members about not wanting to lose out in this transition. Are you confident that they'll end up happy with the end result?
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Arne Sorenson2:14
As happy as you can see, it's been very interesting. From the moment we announced the acquisition of Starwood, the SPG community has been very audible, saying we care about this program, we love this program, don't do this program harm. And that is a great thing because what that means is they care about it, and the last thing we'd want to do is to harm it.
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Sean McCracken2:38
So one of the interesting, I guess, recurring themes from this conference has just been the hope for not just consumer-facing innovation in the industry, but kind of a business strategy innovation. And I think everybody acknowledges the fact that Marriott is the biggest player in the hotel industry, and there's a hope that you guys using that first-mover advantage will kind of push the envelope on that sort of strategic innovation. Is there anything you guys are looking to innovate that the ownership community might be excited to hear about?
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Arne Sorenson3:12
Well, there is constant innovation on essentially all aspects of our business. You know, you think about that in the brand space, and a lot of the momentum and passion today is not just in the brands which have been powerful for years, but some of these new brands. I think about Moxy and AC and Aloft and Element in the United States and the world as an example. These are new brands, and some are at least to some extent they're sort of internally disruptive. And folks say, I want to have one of those because I think they've got a sizzle maybe that can give me more decades worth of value from the real estate investment I'm making. But you also see it on the operational side. What are we doing around the use of technology to make our properties run more efficiently and to run better? Where we can, if you're checking in and we allow you to bypass the front desk, of course, that's the obvious one. Keyless entry is gonna be everywhere before long. But we got to make sure we continue to move forward on all of those things. We are constantly in dialogue with our hotel owners, and in many respects, they are co-creating this with us. They come together with us and we say, okay, here's what we're thinking about, or they say, here's what we need, and what comes out of that is great ideas.
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Sean McCracken4:29
So the deal was initially announced at the end of 2015, closed at the end of 2016. What parts of this deal came together in ways you didn't expect? I mean, what are the advantages, disadvantages of this new merged Marriott that you weren't necessarily, didn't foresee when you first proposed the idea?
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Arne Sorenson4:52
Yeah, I mean, I think that the deal has gone swimmingly. And it is, I think I'm more convinced than ever that it was the right thing to do. I think obviously the reaction from the external community has been also very positive. You look at the way the stock price has performed, you look at the way the industry has responded. I think it's pretty clearly a good deal. But I think it is a good deal for the reasons we anticipated before. It's not that we've discovered whole new things that are different, but it is that scale gives us something, brings you clearly around the loyalty program, around the ability to invest in technology, around the ability to grab share of wallet that we had some of before but we have dramatically today. And you know, just to talk about loyalty for a second, people earn points so that they can use them for a free vacation, right? The most important part of that is the using. And when you have the kind of luxury and lifestyle brands we have spread all around the world that inspire people and they think about travel, they say, you know what, that's where I want to redeem. And of course, that drives them to say, that's where I need to earn, because it will give me a path to have that vacation I've only dreamed of.
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Sean McCracken6:12
So you mentioned you had some scale before, you have more than you did before now, but do you have enough? Or is there another next step to Marriott eventually taking over the world?
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Arne Sorenson6:20
There's never enough. Arne, it's a pleasure talking to you. Thank you very much.
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Sean McCracken6:26
Thank you.