Source: marriott.

com, 2018

MSc Business Management

Oxford Brookes University

Course: P58872 Operations and Process Management

Title: Analysis of operations and process management of Marriott International Inc.

Submitted:17 November 2018

Word count: 2500

Table of contents

1. Introduction………………………………………………………………………….3

2. Analysis of the Marriott’s operations…………………………………..…………..4

2.1 The 4Vs model……………………………………………………………….....5

2.2 Current performance and performance objectives…………………………..7

3. Process and service design…………………………………………..…………..10

3.1 Process types……………………………………………………………….…10

4. Location and layout………………………………………………………………..11

5. Capacity management………………………………………………………….…12

6. Quality management, operations improvement and lean operations………..13

7. The supply chain management and use of IT………………………………….14

8. Use of HR operations function……………………………………………………16

9. Marriott’s Strengths and Weaknesses…………………………………………..17

10. Conclusions………………………………………………………………………..18

11. References…………………………………………………………………………19

2
 1. Introduction

This assignment aims to analyse the operation process management of Marriott

International, to be sure that the company's objectives are achieved with the lowest

possible costs.

Marriott International is an American multinational diversified hospitality company that

operates franchises and licenses hotels, residential and timeshare properties all over

the world under several luxury, premium and select brand names at different price and

service points (Marketline, 2018).

The hospitality industry in which it operates is one of the fastest growing sectors of the

world, and this is due to the growth of the number of people travelling both during

leisure time and for business reasons (Statista, 2018).

According to the revelation of the World Tourism Organization, International tourism

arrivals grew by 7% in 2017, reaching a total of 1,322 million and this growth is

expected to continue in 2018 (UNWTO World tourism Barometer, 2018).

This significant development of tourism means that the competition is particularly high.

Considering the variety of services offered, it is possible to identify the core

competitors in other major hotel chains as Hilton Worldwide Holdings Inc and

Intercontinental Hotels Group Plc (Marriott International Inc, 2018). Furthermore,

Marriott also competes with companies such as Airbnb and HomeAway that, through

online services, allow to book short-term homes/apartments alternatively to hotels

(Marriott Annual Report, 2017) and independent companies in regional markets.

It is, therefore, possible to state that the major pressure that the company faces include

to stand up to this competition, through the expansion of its geographical presence, a

constant improvement of quality, value, variety, efficiency of lodging products and

services. Among the pressures, there are also economic downturns and unforeseen

events that could negatively impact tourism such as political instability, wars, natural

disasters or terrorist activity (Marriott International Inc, 2018).

3
 2. Analysis of the Marriott’s operations

Marriott is a business that produces pure services, although it also has some tangible

elements as restaurant and room facilities. Among the services it is possible to identify

the hotel housekeeping (cleaning, hygiene and equipment’s supply to the rooms); the

supply of the necessary inputs (as food and drinks); the guest arrivals and departures

and the foodservice (Krstic B. et al., 2015).

The transformation process can be defined as any activity that, using staff and

facilities, transforms inputs (materials, information and customers) to create and

deliver outputs (finished products and services) to the customers. Operation

management then concerns with converting raw materials and labour into goods and

services as efficiently as possible (Slack et al., 2016).

Transformed
resources:
-Customers;
-Raw materials
cooked in the
Process:
restaurant;
- staff labour and - Selection of the best supplies,
knowledge;
- capital ordering food and drinks,
reception and warehousing of
them;
- Raw foods into meals and
restaurant service; Tired guest that,
Input through the
- Booking confirmation, check-in, Output overnight
resources
and check-out; products and accommodation, are
services refreshed; cleaned
- Customer service operations and well-supplied
and process financial environment;
transactions; Feedback
Transforming - Transfer to and from the airport
resources: - Laundry;
-Staff
- IT/Website; - Bedroom cleaning
- equipment; - Lounges and bar service
-buildings;
- Suppliers ;

4
 2.1 The 4Vs model

Even if operations processes are similar because all them transform input in outputs,

they differ each other by four ways: volume and variety of their output; variation in the

demand; the degree of visibility which customers have of the output’s creation. (Slack

et al., 2016).

High Volume

It is possible to state that Marriott has a high volume considering the large number of

brands located all over the world, the high number of employees (177,000 according

to Mergent, 2018), the reported revenues that for the fiscal year ended December

2017 reached 22,894 millions of US Dollars, with a 34,1% increase over the previous

year (Marketline, 2018). Noteworthy is also the occupancy rates that increased from

68.7 per cent in 2017 to 73.7% in 2017 (Statista, 2018).

High variety. Marriott has a wide range of services and exploits the flexibility and

diversity to produce specific services that match the needs of any type of costumer.

Choice about the type of hotel: premium, luxury or selected (Marriott,

2018); "Your room, your way”, with which the company gives guests a great
choice with regard to the type of room and bed type preferences (Marriott,
2018);

standard or mobile Check-in and Keyless to unlock the room with

the IPhone (Marriott, 2018);

Mobile Request that "enable guests to engage in a two-way chat

with the hotel before their arrival and throughout their stay
(Marriott, 2018; Marriott Annual Report, 2016);

travel packages based on what the guest is looking for ( e.g. Family
Fun, Honeymoon Bliss, Ultimate Golf or Retail Therapy) (Marriott,
2018).

"Meetings made at Marriott": over 80 hotels linked to transports and

a 2000 people's capacity, the availability of meeting esperts that
"ensure it goes smoothly" (Marriott, 2018)

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This flexibility obviously translates to higher prices compared to hotels offering

essential services.

High Variation

Even if Marriott states that the “company-operated and franchised properties fluctuate

only moderately with the seasons and is relatively stable”, while “some resort

properties may be season depending on location” (Marriott Annual Report, 2017),

variation in demand is, anyway, higher compared to other sectors and influenced by

many factors including political and economic ones.

High Visibility

Although some operations have a low visibility, operating the staff in the back – office

(e.g. online booking management), the majority of the Marriott’s operations dealing

with the accommodation service have a high visibility as, for example, the check-in

and assignment of the room, the reception, where the staff operate in what is termed

a front-office environment (Hill T., 2005).

HIGH VOLUME
- Systematization of the work;
HIGH VARIETY
- a high repeatability that means that the
-Flexibility;
employees are specialized in a specific area
and carry on, day by day, the same tasks; -Match guest’s needs;
- The job is standardized namely there are -High unit costs;
standards procedures that specify how
every task should be carried out and help
to maintain the efficiency.

Implications (Slack et
al, 2016)
HIGH VISIBILITY
HIGH VARIATION -short waiting tolerance;
-FLexibility; -Satisfaction governed by guest perception,
rather than objective criteria;
-Changing capacity;
-Customer contact skills needed;
-In touch with demand:
- Costumer experience the front-office
-High unit costs. operations

6
It is possible then to affirm that Marriott has a high unit cost model.

2. Current performance and performance objectives

Marriott has strategic operational performance objectives such as reduce carbon and

water intensity, reduce food waste and achieve a minimum in the renewable energy

use (Marriott, 2018) as well as performance objectives related at a day-to-day

operational level and aimed to satisfy customers and contribute to competitiveness.

Quality: for Marriott obviously, customers are in the foreground. However, because

“New products and services are easily copied and do not provide any long-term

competitive advantage… the major differentiating factor is the quality of service

provided by employees directly to customers” (Harsha E. Chacko, 1998).

Tools used by Marriott to

make sure that the guests
effectively enjoy the services:

M Beta Charlotte Marriott City

Center hotel in North Carolina
where guest became part of the
decision- making giving real
time feedback on the
innovations (Marriott, 2018).

Guest Satisfaction Surveys that

encourage guests to evaluate
the hotel and the staff (Marriott,
1964).

Marriott Verified Guest Reviews

on the website (Marriott, 2018).

It is, therefore, essential for Marriott to have the right kind of employee that should be

courteous, helpful, smiling, friendly and efficient to provide guests with a welcoming

and comfortable environment (Marriott, 1964). Marriott also tries, to serve better its

guests, to obtain, through a central database, details such as what the guests

purchase and to track individual preferences (Dibb. S., 2016).

7
Cost: Although for Marriott having low costs is not a priority, considering that guests

are looking for the quality and are willing to pay for it, it tries however to reduce costs.

Best rate guarantee, which assures that guest have

always the best rate available when book directly
with Marriott, the company aims to avoid paying
commissions to online travel agencies (Marriott,
2018);

Through its lodging business model that "involves

managing and franchising hotels, rather than owning
them" (Marriott International Inc., 2009), allowing the
company to have a growth and, at the same time, to
reduce the risks in a cyclical industry;

Buying products and suppliers for several units allows

Marriott to negotiate better rates (economy of scale);

Cost saving through centralized operations such as

marketing or human resources (the company expect to
reach the goal of $250 million of savings in 2018 (Marriott
Annual Report, 2017);

The LEED Volume Program (green hotel porotype) that

allows Marriott to save 25 % in energy and water
consumption for the entire life of the hotel and so the
initial investment should be repaid in two-six years
(Marriott, 2018).

Speed: Marriott aims to respond fast to guest’s request and to increase the speed of

many operations in order to reduce the time that the guest has to wait as well as the

manage employee’s time especially integrating as much as possible the technology.

For example, it introduced, in many of its hotels, the mobile check-in (Marriott, 2018)

or it uses, in many of its hotels, web-based programs to manage the rate and both

reduce “time spent on rate program creation and maintenance and increase the speed

to market of new products and services” (Marriott Annual Report, 2016).

Flexibility: Marriott shows flexibility in several ways. First of all, it faces the necessity

to increase the volume of production to meet the increasing demand through a

significant expansion both in terms of geographic locations and new acquisitions as

8
the Starwood Hotels & Resorts Worldwide (Marriott, 2016) in order to provide its

customer more choice about location, kind of hotel and the amount that a guest is

willing to spend. It is fundamental to improve continuously the type of services offered

especially using the new technologies as well as the variety of food paying attention

to trends and preferences among diners (Marriott, 1964).

Still, flexibility is evident in the possibility to choose the room and bed type preference,

to change idea about the reservation, to pay after instead than in advance and in many

other services (Marriott, 2018).

Dependability: means to be able to meet a guest’s request, and to do “things in time

for customers to receive their goods or services exactly when they are needed, or at

least when they were promised” (Slack et al., 2016). It is then important, for example,

that the rooms are ready on time for the guest’s arrival or that the account is available

when the guest leaves.

It is clear that order qualifiers for Marriott are quality, dependability and flexibility but

the order winner is quality and dependability.

Polar chart- Marriott Int. Performance Objectives

Quality
10
8
6
4
Dependability Speed
2
0

Cost Flexibility

9
3 Process and service design

The “design is the process of satisfying people’s requirements through shaping or

configuring products, services and processes” (Slack et al., 2016).

In the hospitality sector, for example, there is the guest arrivals and departures.

Because for Marriott this competes on its ability to be quick, the process needs to be

designed to minimise the time between the guest’s arrival, the registration and the

room assignment. So, for the Rewards members, it was created the mobile check-in

and check-out as well as the Mobile Key (Marriott, 2018). In this way the guest is

notified when the room is ready and, once arrived at the hotel, it can go to Mobile

Check-in and immediately receive the key or to locate the room and unlock it by Mobile

key.

3.1 Process Types

Process types are the general approaches to design and manage processes/activities

aimed at producing services or products, and they are conditioned by the position of

the process on the volume – variety continuum (Slack et al., 2016).

Hotels, in general, are service shops processes defined as those that have levels of

volume and variety as well as customer contact, customisation and staff discretion

halfway between the professional and the mass service ones. Furthermore, the

service includes both front and back office activities (Slack et al., 2016).

For example, in hotels, the staff must, in general, to follow set procedures (that is

typical in mass services approaches) but, sometimes, it also can act discretionary in

order to meet the guest’s need and request. This brings the process we are talking

about close to that typical of the professional services where the process is adaptable

to meet the individual needs.

Below the process mapping (that involves describing, through symbols, the activities

of which a process is composed) of a guest’s check-in via app.

10
 Chec Notifica
Start of the k-in Go to the
tion’s Go to the
process online Mobile Check-
waiting hotel
in

Collectio
End of the Go to the room n of the
process key

4. Location and layout

The location is considered very important, firstly, because decisions about it have

effects both on operation’s costs and revenues (Slack et al., 2013) and, secondly,

because, once taken, it is difficult as well as expensive to move it.

Considering the long-term fixed investment and the huge amount of capital necessary

to establish a hotel, it is clear that this type of decision is even more significant in this

sector (Byung D. S., Young D.K., 2017).

The factors that influence the hotel location's decision are many, and among these, it

is possible to mention: the volume of demand in a region, the proximity to the demand

stream. For example, a resort will be more attractive if located near the beach rather

than inland. Likewise, a luxury hotel located in a city must be situated in the centre

(close to shopping areas and attractions) and, if possible, close to airports, train

stations, and major transport links to satisfy both tourists and business travellers.

It’s possible to see that “upscale brand hotels are more likely to locate close to hotels

of the same type” (Yang Y et al., 2012).

Noteworthy is also the presence of urban regulations that place restrictions or the

political stability and, again, the cost of land or the degree of economic advantage that

11
the company can receive from management or lease agreements, franchising and so

on.

The Marriott’s layout (physical positioning of its people and facilities) is a mix.

It is possible to notice a fixed layout concerning the bedrooms or the room service,

considering that are the employees that, bringing the equipment they need, move from

a room to another one in order to serve them (Lockwood A., Jones P., 2001) as well

as a functional layout. In fact, the guests of a hotel have different needs, and then,

when checked in, everyone will generally take different routes to meet these needs.

There will be, for example, those who need to eat and who, instead, prefer to relax in

the gym.

5. Capacity management

The capacity can be described as the maximum amount of product or service a

business can deliver over a period of time such as, in Marriott, the number of rooms.

Capacity management is then the capability to manage the capacity in order to meet

the current and the future demand (Slack et al., 2016) and avoid an under-utilisation

that leads to high unit costs. In fact, if a room remains empty, it is a sale lost because

the room cannot be stored.

Also considering that weekly and seasonal variations in demand influence the

hospitality sector, the capacity management allows Marriott to deal with these

demand’s fluctuations through a forecast as accurate as possible and the application

of two methods:

12
 •It allows Marriott to adjust the capacity
level to meet these fluctuation
increasing, for example, the number of
Chase demand plan (Slack et staff during the week-end, or summer in
al., 2016) the case of a resort, through part-time or
seasonal workers or adjust the number
of hours worked. (Jones P., Lockwood
A., 2012; Park. S. et al., 2016)).

•allows Marriott to increase the demand

in periods in which it is low in order to fit
the capacity, by doing a pricing discount
Demand Management (Slack or promotion (Jones P., Lockwood
et al., 2016) A.,2012, Hill T., 2005; Park. S. et al.,
2016) .

However, considering that Marriot occupancy rate is increased during the years,

reaching the 73.7% in 2017, it is possible to conclude that it is achieving its goal to

match the capacity with the demand (Statista, 2018).

6. Quality management, operations improvement and lean operations

In 2007 Marriott Business Services (the global shared services center for Marriott

International), as well as Starwood Hotels in 2001 (Lancaster, 2011; Rauch et al,

2016), adopted a Lean Six Sigma methodology that rely on DMAIC (Define, Measure,

Analyze, Improve and Control) road map namely a system to improve existing

processes (Weller P., Barden R., 2008).

The DMAIC process can be summarised as shown below:

13
 Definition of a
problem to check
what is considered Analyze the root
as value and what that causes defects
is considered as a Measurement of and leads to waste
defect (from the in the process
point of view of data collected. using tools as, for
guests or example, the
employees problem-analysis
ones.
depending on the
problem).

Carry out controls

to verify that the Improve and
changes deemed eliminate the
necessary are problem using tools
actually made and such as the 5S
that these changes (standardizing,
have brought sorting, stabilizing,
greater efficiency, shinig and
using, for example, sustaining).
a control chart.

It is, then, evident that the Lean Six Sigma is a combination of lean methods and Six

Sigma concepts that aims to improve constantly the operations as well as the

customer’s satisfaction through the elimination of both wasteful steps and variations

that can occur in the processes (Slack et al., 2016).

7. The supply chain management and use of IT

The supply chain management involves all the activities necessary to plan, control and

execute a product/service flow.

Marriott, actually, with the Starwood acquisition, has more than 400 international

purchasing agreements with suppliers and, obviously, "leveraging the volumes from

both organisations", it has been able to renegotiate best economic conditions with

many of them, such as Samsung and LG (Harris, 2017).

14
Marriott has reduced the costs and increase the efficiency thanks to its supply chain

management.

In fact, as stated by Stephane Masson, Senior Vice President of Marriott’s Global

Procurement, it adopts a hybrid approach that allows more flexibility.

•8 offices on the Vice president

four continents,
which are in •smaller offices
charge of that operate at a
“contracting, local level,
training, negotiating with
•Centralization: local vendors for
sourcing and all the offices
supporting an area that
report to the includes at least
activities for Vice President;
hotels in each of two or more
its •Decentarlization: hotels.
region"(Harris, every office has
2017) a certain level of
autonomy.
Marriott Clusters
International
Procurement

Finally, interesting is also how Marriott uses the technology. It adopted an integrated

P2P (procure-to-pay) system (known as Marriott's Procurement 2020 Vision) that

includes a single platform for e-procurement as well as one per accounts payable.

Because these platforms work together (“ the company negotiate a contract, uploads

the contracting terms on the e-procurement platform, and when the goods reach the

hotel, the invoice is paid automatically through the accounts payable system”), data

are transparent, easy to analyze but, above all, this system allow the company to

determinate, in real time, which and where resources are needed (Walker, 2017).

15
8. Use of HR operations function

Offering the Marriott a service and employing it about 177,000 people (Marriott Annual

Report, 2017), it is evident the importance of the human labour. Essential, then, to

manage all these employees and to meet the variation in the demand (typical of this

sector), is the HR department that allows the company:

Train the employees

and develop their skill Adjust the number of
To recruit and select set in order to allow the employees or the
candidates with the "Functional flexibility". In number of hours worked
necessary skills, this way it is possible to to meet the changes in
depending on the have versatile demand, allowing the
department: "right employees that are able "numerical flexibility"
people for the right job". to perform different (Jones P.; Lockwood A.,
tasks (Jones P., 2012).
Lockwood A., 2012).

In order to encourage a high level of performances and retain the best talent, Marriott

offers to its employees’ recognition and rewards as well as growth opportunities

(Marriott, 2018).

16
9. Marriott’s Strengths and Weaknesses

Strenghts Weaknesses

•Its lodging business model that • The Marriott's lodging business

brings the company to manage and model is, at the same, time,a
franchise hotels instead of owing weaknesses because Marriott's
them in order to reduce economic success depend from the ability to
risks; maintain positive relationships with
• Presence across the world and the owners of hotels that Marriott
strong brand portfolio: Marriott is a manage or franchise;
multinational that operates, •Price: despite the majority of
franchises and licenses a strong Marriott's guests are willing to pay
brand portfolio of hotels, residential for its quality services and despite
and timeshare proporties in 127 the Marriott, through its portfolio, try
countries all over the world. The to meet different economic needs,
portfolio includes luxury, premium however,it still has very high prices
and select brand names able to that make its hotels out of reach of a
meet different needs; important part of tourists;
• Focus on technology to provide the • Many types of services and
guests an unique and customized products offered by Marriott can be
experience and, especially, to meet copied from the competitors and, in
the needs of business travelers who fact, looking at the Hilton's website
are heavy users of mobile (Hilton, 2018), it is possible to see
communication devices such as the resemblance with Marriott's
smartphones (Dibb S. et al, 2016); website.
• Marriott offers its employees a
serene and stimulating environment
which, in turns, leads the employees
to take care of Marriott's guests
(Marriott is among the 100 Best
Companies to work for in 2018)
(Marriott, 2018).
•Economy of scale: buying products
and suppliers for several units
Marriott is able to negotiate better
rates;
•Excellent supply chain
management: there are numerous
suppliers so as not to be left without
materials as well as local suppliers
in order to reduce delivery times.
•Guest loyalty: Marriott's loyalty
programs had nearly 110 million
members in 2017, the largest loyalty
programs in hospitality (Marriott
Annual Report, 2017).

17
10. Conclusions

Marriott is a leading company in the hospitality industry, showing not only the ability to

compete with other large multinationals but also to overcome them in the competition.

It performs excellent ability to adapt itself to the evolution of the society, constantly

implementing quality and variety of services offered, also through the observation of

the trends, and using technology to gain a competitive advantage. In fact, the

technology is used both internally, to efficiently manage the workforce and the

processes that lead from the purchase of raw materials to the guest's offer of quality

services, and externally in order to meet guest’s expectations and create a more

personalised experience for guests.

18
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