Marriott’s revenue and tech chief on travel retail ambition

Just a few weeks ago, Marriott International began testing a search with an artificial intelligence tool on its Homes & Villas website.

The initiative is based on natural language search and enables users to describe what they want from a vacation. The tool is in a testing phase with the hotel giant planning to take the learnings from this smaller part of the business before applying the tool across the group more widely, including its main site eventually.

“AI, of course, is a critical topic and is going to transform so many things, so we want to experiment,” said Drew Pinto, executive vice president and chief revenue and technology officer for Marriott International.

“We have a thing called the [generative] AI incubator that we set up, which is a place where we can try proofs of concept and organize all the ideas that our company has around how we use this technology. One of the top ones was search, and how do we make search much more effective and targeted and also just kind of exciting for the customer.”

While it’s early days for the AI search tool, Pinto added that it has been well received, but that customers remain conditioned to enter destination and dates even when using the natural language-based search.

“It’s too early to talk in terms of conversion but certainly people are trying it and I think it’s an indication of what’s to come. We’re going to learn a lot from it, both good and bad. We’re also discovering here, and I think probably a lot of counterparts around the industry are learning the same. GenAI is very exciting, and I think it unlocks a lot, but it’s also really hard to execute. The demand of these languages, the cost of it and the security and privacy piece. It’s a lot to learn and we’re excited to do it, but we’re going to be pretty thoughtful about how we wade into this space.”

The launch and learn approach is a bit of a departure for the company, according to Pinto. While in the past, it was more likely to perfect something new before putting it in front of associates and customers, now, where it’s perceived lower risk, it’s happier to put it out there and gauge feedback.

Another example is the recent launch of a global dining portal, which brings together the company’s collection of bars and restaurants and lets customers search, again using natural language, across its entire offering.

“It’s going to bring all this different content that was hard for the customer to see into one place and make it really easy to discover.”

Mindset matters

It may be a little rough around the edges currently, Pinto admits, but that’s part and parcel of the change in philosophy.

“I think that’s a reflection of the new attitude we have. If it’s an area of our business that we think we can accept some risk, let’s try and let’s let the customer and our associates tell us what’s good and bad. And we will kind of adjust as needed and really improve as we go. I think what it’s going to be reflective of is my vision here, which is for us to be thinking of ourselves as a travel retailer and being a best in class travel retailer.”

Pinto is 14 months into a newly created role within Marriott, which sees the revenue and technology functions combined.

“We’ve never had this role before, at least for the 20 years that I’ve been here,” said Pinto. “The thought behind it was really to bring together all our commercial functions with the digital and technology areas. We’ve taken all our sales channels, revenue management, all our pricing, customer engagement centers and then also all the commercial leaders in the continent – we have a headquarters and continent structure – and we brought that all together and paired it with the main points of delivery that are becoming more important, which of course, are digital and technology.”

He added that a year in the feedback has been good. “I feel like we’re having really good commercial conversations, and that the digital and technology teams in particular are much more integrated into the strategy of the business. So we’re learning as we go, but I think it’s been a really good idea.”

But the AI developments, the travel retail strategy and Pinto’s wider remit are also part of a much bigger technology transformation that sees the replacement of its three core technologies: property management system (PMS), central reservation system (CRS) and loyalty platform.

Not unlike the message from many travel companies currently, he added that it all has to start with the customer experience being more digitally enabled. It also take the company’s employees into account with the promise of more efficient processes freeing them up for other tasks.

“There’s the expectation of the guest booking with us or staying in our hotel, that they’re going to have similar capabilities that assist them in their daily lives or purchasing other products. We have been in a position to deliver on some of those things, but not everything and certainly not at speed and at scale that we want. So really our investment is a recognition, less so about we have this big technology project, which is true, but that we are now going to be investing more time, focus, energy and of course financial resources into these areas.”

Clearly, the transformation goes right to the top of the organization with chief financial officer Leeny Oberg commenting earlier this year that Marriott would be making higher than normal investment in technology. Announcing full-year 2023 results in February, she said, “Full year investment spending could total $1 billion to $1.2 billion. This includes another year of higher than historical investment in technology.”

“This is a really clear commitment,” added Pinto, and there’s no beginning and end because it’s “a new mindset and critical for our business.”

New partners, modern platforms

And alongside the wholesale replacement of the CRS and PMS, with the company working with technology providers including Amadeus, Agilisys and Oracle, it’s also making infrastructural changes so that its platforms are “up to a standard that’s modern, scalable, cloud-based. Everything that you see and read about the proper way to build a sustainable and flexible technology platform for tomorrow’s demand, is all part of the plan.”

It’s still early days for developments on the loyalty side. With Bonvoy loyalty program members increasing and the related app bringing 22% more nights to the company in 2023 year over year, it’s not a surprise that Marriott wants to modernize the platform.

“It’s really early days. We don’t have vendors all figured out. Underneath it all, our loyalty platform runs on a system that’s on a mainframe. It’s many years old, it’s not cloud-based, it’s very inflexible. We’re looking for capabilities, where we can customize the loyalty program, make it more personalized and be much more streamlined for our Bonvoy members. We have great ideas, some which we’ve been able to implement that you see in the market. We have many more that are on the shelf, and we’re running into those limitations of just what an old mainframe can and can’t do.”

With such a significant technology transformation ongoing, in addition to the need to manage the rapid pace of technological change, especially when it comes to AI, Pinto sees the sheer complexity of it all as the greatest challenge.

“We have many things that we’re doing at the same time, and we realized that this is one of the biggest technology transformations ever done in our industry, certainly in the history of our company. So I think it’s just making sure we’re very diligent about things like program management, vendor relationship, scope and prioritization. I’m very confident in the setup that we’re going to be successful. The commitment that Tony [Capuano] talks about publicly, that translates clearly into the structure we have and the oversight we have on it. The board of directors is very involved, supportive. It’s just a big undertaking. We decided to go pretty ambitious here and I’m okay with that because we can see what it’s gong to unlock for our company and for our customers. We’ve just got to manage the complexity.”