Chinese Whispers

From having an Indian chef in its key hotels to crafting customised destination wedding packages, Michael Malik, area VP, East China, Marriott International reveals how the company is going all out to woo Indian travellers

By Vinita Bhatia

Though he is in forties, Michael Malik considers himself one of the old-timers at Marriott Inc. The reason? He began his professional career with the company 23 years ago in Hong Kong, and counting!
He was in the India recently, leading a sales mission to raise awareness about Marriott’s Chinese hotels amongst its Indian business customers. We spoke to him why India is an important market for Marriott not just in China, but throughout Asia Pacific; about the company’s joint venture with Alibaba in China and whether this association will be extended to India as well.
Excerpts from the interview:

What is the objective of the sales mission that you have organised in India?
As Indian travellers seek newer experiences, China is a great place for them to visit. Our Chinese colleagues, too, need to understand their expectations. Unfortunately, a lot of information we get is only from the media. It is always best to meet customers first hand to understand how we can improve their travel experience.
For this mission I am representing Marriott’s 286 operating hotels in China. Out of the 30 Marriott brands, we represent 23 right now, and my primary responsibility is for operations in the East China area. I recall when I started with Marriott Inc, we had one hotel in Shanghai; now we have 42. So, I like to think that we are pioneers in that country.

Especially now with the integration of Starwood and Marriott?
Yes, it’s been a very exciting year for us. And we want to keep our focus on India because it is a very important market, not only for China, but also in Asia Pacific. This is the fastest growing market as it feeds a lot of business into China.

Is this the first sales mission organised for East China?
This is our second. Every year, Marriott has a global sales mission in Mumbai. I had visited the city three years ago for that, since there was not enough representation from China. We saw that there was a gap, but also a huge opportunity. That same year, we organised our own mission with some of our general managers, who were overwhelmed with the response from tour operators and other visitors.
As we started learning more about this market, we understood the travel behaviours of MICE customers and fully independent travellers (FIT) as well as third party operators. It has been a great education over the past few years. And in our second year, we have more general managers travelling with us.

In your second edition, what evolution have you seen in customer behaviour, trends and expectations?
One thing we understand is that face-to-face interaction makes a lot of difference. We can do this remotely but it doesn’t have the same impact. Once the relationship is built, we see operators from this market are more willing to give business to us. And we have seen that it has become much more easier.
We have also seen that hotels are taking business more seriously, catering to all needs of Indian travellers visiting our market. For instance, we learned early on that F&B is very important for them, so we have Indian chefs in our key hotels where we have huge MICE movement. This has changed customer behaviour, as they don’t have to worry about the food.

Besides F&B, how are you addressing the language issue, since China is predominantly Mandarin-oriented?
In Shanghai, the language capabilities are not an issue. However, we have associates from different nationalities to help guests from all over the world. For instance, in one of our hotels, the general manager is Dutch and the F&B director is Indian. This heightened level of taking care of Indian travellers in the hotel, ensuring their MICE experience is good and safe, is gaining ground.

As markets go, do you think Asia Pacific is a fairly stable and mature one?
There are great destinations all over Asia Pacific with different brands that we are growing. At the same time, there is a huge opportunity for outbound business whether from China into Asia Pacific or India going to China. The opportunity is vast, whether for India or China. The middle class is growing very quickly and is travelling more frequently.

What about India – do you think this market is at the aspirational stage?
I really can’t speak too much for India since China is my primary market. But I think it’s very aspirational. There is a huge delta for growth because amongst the travellers. FITs are probably more affluent and looking for specific experiences especially in the luxury tier. Then, you have the MICE segment.
I don’t think we have hit the peak there yet. The Indian traveller destination is usually the U.S., U.K., Bali, Thailand, etc., which are getting saturated. So they are seeking newer experiences. Hence, we are working on promoting China.

Does this same rationale apply to Chinese travellers as well?
Yes, it’s pretty similar for China where the middle class is huge and aspirational. There is a huge opportunity for them to explore new destinations.
Interestingly, the leading destinations for affluent Chinese people are niche places like Iceland or the North Pole as this segment is seeking experiences that few can afford.

What is the percentage of domestic and international travellers in East China?
In our hotels around 50% of our travellers are domestic Chinese guests. The second largest demographic is the U.S., followed by South East Asian countries, like Hong Kong and Singapore.

What about Indian inbound travellers?
For Marriott, Indians actually are amongst the top 10 demographic, though it varies from hotel to hotel. We see this mostly in MICE, where their business percentage is higher than in FITs. Interestingly, some of our GMs are seeing more Indian travellers coming from the corporate segment, especially upper and middle management personnel in companies working in China.

That’s unsurprising, since more Indian companies are setting base in China and their company personnel travel to the country often. However, have you seen an uptake in the movement of leisure travellers?
Not yet and that’s part of the reason why I am over here. We are looking at luxury tour operators who provide specialised experiences for customers and have been able to talk to few who focus on super luxury brands like Ritz-Carlton and St. Regis. We want to explore if they can build luxury packages for guests.
Last year, at the sales mission, we spoke to an organiser organising
specific sporting events for affluent Indian travellers who wanted to watch a
Mick Jagger show in Shanghai or Formula 1 in Shanghai. So, there is a lot of work for us to do for the FIT segment and we don’t see that going up as fast as the MICE segment.

And why is that?
It’s easier for us to reach the MICE segment – 1,200 people come at a go. For FITs, we need to build a luxury experience.
One destination that we are keen to promote is Sanya Island in Hainan Province, which is called China’s Hawaii. Luxury hotels from almost every brand are present there and it is a great opportunity for us. We also think it is a great location for a destination wedding.

That’s interesting; destination wedding in China?
Yes. People go to Bali for leisure and destination weddings. So we think, why not fly them to Hainan Island by Hong Kong?

To do that wouldn’t you need to do a lot more than interact with tour operators at a sales mission? What kind of intuitive marketing strategies are you adopting to promote this?
Connecting with third party agents is crucial because wedding planners usually handle large Indian weddings. At the same time, we are trying to connect with tourism agencies to leverage our mutual strengths and drive more destination marketing.

Let’s talk about hospitality trends. Do you see any common ones throughout the APAC region?
We see digitisation as a very important trend and our company is spending a lot of time and effort investing into it. We have our own apps – for booking, meetings, etc. – that create a lot of convenience for customers.
At the same time, we are also working with third party agents. A few weeks ago, Marriott entered into a joint venture with Alibaba to build a platform to leverage their members and our members and develop an experience for both our customers globally. We have around 100 million Marriott loyalty customers, Alibaba has over 500 million and we would like to target these people.

How exactly will Marriott leverage Alibaba’s digital strength?
Our joint venture announcement with Alibaba was very preliminary, and basically it is to leverage their expertise in the digital world and our expertise in taking care of customers. Drawing on resources from both Marriott and Alibaba, the venture will manage Marriott’s storefront on Fliggy, Alibaba’s travel service platform. It will also market directly to Alibaba’s customer base, provide a link between Marriott’s loyalty programmes and Alibaba’s loyalty programme, and support Marriott hotels globally with content, programmes and promotions customised for the Chinese traveller.
For instance, when an Alibaba customer travels to India, he will be encouraged to stay at a Marriott hotel, because with this venture we will make his entire travel experience frictionless, right from planning, booking, paying and managing, including activities associated at the destination like shopping, dining and sightseeing. It will be very hassle-free. In some hotels, they can even use Alipay, which is a digital payment platform.

Can we expect an extension of this partnership in India anytime soon?
I can’t share details, but I can assure you that the reason we partnered with Alibaba is because they can do it globally for us. At this point, the focus on our joint venture is in China, but I know that Marriott would like to have this ease of payment for all its customers globally. It’s a matter of time.

If we were to look at the APAC for Marriott, then the first two markets would be India and China, right?

And the third?

Though several structural reforms are needed in various parts of APAC, the region is still exhibiting a robust growth. However, manpower productivity is one area that continues to pose a challenge for this industry. How is Marriott trying to address this issue in China?
I am going to use myself as an example, 23 years and counting! Marriott is a family-run business and our core values include taking care of our associates so they can take care of the business, as then the customers will return.

And this applies after the Starwood acquisition?
Absolutely. The most important thing that we tried to instil when we took over Starwood was to ensure that people understood our culture and also understood that people came first. Obviously there was a lot of apprehension with one company taking over another. However, we only talked about our company culture from day one, which is taking care of our people, developing careers, growing it.
Going back to my career, the company provides us opportunities to grow and I am proud to say that we have amongst the lowest turnover in the industry as people see the value of staying Marriott. Despite the huge population in China, there exists productivity issue. Hence, we believe in creating partnerships with educational institutions so that we can grow the future of hotel industry.

In 2013, China Marriott International, together with Anhui Zhong-Ao Institute of Technology in China, launched an educational institution to develop the next generation of the local hospitality workforce. How many such institutions are you affiliated with in China approximately?
It’s over 100 institutions, and I was there when we started the partnership with Anhui Zhong-Ao Institute of Technology. After regular sessions, we recruit their second year university students who are seeking a hospitality career and offer them internships in our hotels. We have a talent acquisition team that handles these relationships.
So, in China alone, we have over 100 partnerships with hospitality or polytechnic schools and we recruit from these schools. Through this, we can develop a pool of trainees every six months or annually, groom them and keep them interested in growing their careers in the hospitality industry.
There is also an entire training program for the retention of these trainees, including how to take care of them and to just use them as additional labour, and groom them so that they want to stay with our company.
Marriott also has its own foundation in China, called the China Hospitality Education Initiative (CHEI), which develops syllabus for the hospitality industry. This is not to benefit our hotels directly, but to benefit the hospitality industry in general.
Marriott has a very strong presence in China when it comes to developing future hoteliers and of course we have a lot of partnerships with major schools globally where we go and recruit young talent. So definitely that gap has been filled very well. However, it’s still a challenge, because the hotel industry is hard work – there are long hours, a lot of stress. Not everybody can be a hotelier, it takes a very special personality to be a hotelier.

Coming to your hotel projects, what is the pipeline for the next couple of years?
We have 286 hotels in the country and we hope to take this up to 300 within the next three years. And in a city like Shanghai where we have 40 hotels, we are still adding inventory. So, obviously there is room for growth. Our downtown hotels are running at 92% to 93% occupancy.

Is the growth coming from cities like Beijing and Shanghai?
Our growth is predominantly in secondary and tertiary cities, where a lot of people are looking to spend money in luxury or even limited service hotels. In these markets, the government too is helping hotels to open so people can go, dine or to stay there.
Interestingly, in these markets, our hotels’ growth relies heavily on F&B, be it restaurants, catering, restaurants or weddings. In some hotels, the F&B contribution to overall revenue is almost 65%.

Have standalone restaurants posed any kind of a competition to F&B outlets in your hotels?
Standalone restaurants have actually helped us improve our standards. Earlier, we didn’t have that competition. Now since customers have a lot more choice in the market, we have to ensure that the service quality of our products is superlative.

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