Marriott PESTLE Analysis
Marriott PESTLE (or PESTEL) Analysis assesses the brand on its business tactics across various parameters. PESTLE Analysis of Marriott examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Let us start the Marriott PESTLE Analysis:
Quick Glance:
Political Factors:
The political factors in the Marriott PESTLE Analysis can be explained as follows:
Marriott has its presence in over 130 countries in the world. In 2017, it expanded its presence in political stable countries like New Zealand, Finland, Lithuania, Mali and Ukraine. The acquisition of Starwood Hotels by Marriott in 2016 helped both the chains in bringing down their operational costs. But Marriott is still unsure whether this will help in increasing their revenues or not. In the past, Marriott’s revenues have suffered due to the increase in the terror incidents.
The Mumbai terror attack, the Nairobi attack are the few examples of it. Any terrorist activity if happens, on any of the Hotel chains of Marriott, can cause a serious harm to brand’s reputation and its customer base and hence revenues. Also, Marriott has existence in countries where corruption is the norm but they are required to abide by certain laws like U.S. Foreign Corrupt Practices Act which might make it difficult for them to do business in that particular nation.
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Economic Factors:
Below are the economic factors in the PESTLE Analysis of Marriott:
Since, Marriott operates in countries outside U.S. as well; the fluctuations in the local currency will also impact the performance of Marriott.
If the dollar becomes stronger as compared to the local currency, then the hotel will be getting lesser U.S. dollars in exchange of the local currency. And since there are constant currency fluctuations, it becomes difficult for Marriott to get an estimate of its assets. Also, a significant chunk of revenue is generated from U.S. Government spending. The recent cuts and the restrictions put on the spending have impacted Marriott adversely. And since, Marriott provides mostly Luxury & Premium services; it can face a decline in revenues in case of an economic slowdown. While its Select category which provides a homely experience sans charging high rates, might still flourish during economic downturn.
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Social Factors:
Following are the social factors impacting Marriott PESTLE Analysis:
Since hospitality industry is a very competitive industry with Marriott facing competition from more than 1400 companies in U.S. alone, it is important to provide top – class and timely services to its customers. Also, customers prefer to associate themselves with brand. Keeping this in view, Marriott has more than 70% of the rooms in U.S. which are affiliated to a brand. It is important to have different types of hotels which cater to the needs of different people. Marriott has categorized its hotels into 3 parts; The Luxury, the Premium and the Select. Marriott, in order to retain its customers and attract more customers provides a Loyalty program named “Marriott Bonvoy” which aims to provide its customers with free hotel stays and additional discounts. Marriott also has a website through which people can book hotels of their choice at the best deals and packages.
Technological Factors:
The technological factors in the PESTLE Analysis of Marriott are mentioned below:
The emergence of the third–party service providers is a cause of concern for the hotel chain. The booking of their hotels through indirect booking channels can increase their overall cost and hence lead to a decrease in its profitability. Although, the Loyalty Programs schemes have significantly reduced the impact of these travel booking agents, but Marriott can’t possibly overlook it. Marriott should also focus on keeping a pace with the technology to reduce their operational costs and customer retention.
There is also a significant need of laying down an infrastructure which protects the customer’s information and is prone to any leaks and hacks.
Legal Factors:
Following are the legal factors in the Marriott PESTLE Analysis:
The Data Security incident which happened in November 2018 has made Marriott subject to several lawsuits. The incident led to the disclosure of the personal information of more than 380 million visitors. After this incident, the ICO London sent a notice to Marriott stating that an investigation will be done on the company’s privacy policy. These sorts of investigations can lead to hefty fines and penalties. Apart from that it can deteriorate company’s reputation which can shake its customer’s confidence.
Environmental Factors:
In the Marriott PESTLE Analysis, the environmental elements affecting its business are as below:
Marriott claims to abide by the different Environmental laws and regulations prevailing in the countries where it operates. Marriott, in a major step towards sustainability decided to eliminate the usage of all plastic straws in all its hotels across the globe by July 2019.
This will decrease Plastic Straw’s consumption by 1 billion units. Marriott has been able to sensitize more than 500000 of its hotel workers regarding the issue of human trafficking. Marriott’s program “Serve 360: Doing Good in Every Direction” focuses on UN Sustainability goals like Human rights and reducing carbon footprints etc.
To conclude, the above Marriott PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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