Profit by Design: An Interview with Michael Wang of Marriott International
Marriott International’s Michael Wang, Senior Continent Head of Global Design for Asia Pacific Region, spells out how the future of hotels is being redefined, with Asia Pacific reacting faster to the market than anybody else
The Marriott Global Design Asia Pacific Confluence 2018 was not just another event that was designed to impress Indian designers and hotel owners. It was a unique platform designed to unlock minds and awaken ideas.
Michael Wang, Senior Continent Head of Global Design for Asia Pacific Region, was clear about the agenda of the first-of-its-kind ‘design confluence’ that was co-created by Hotelier India: to explore great Indian architects and designers, who lacked exposure to world-class events like these. More to the point, this was the need of the hour as Asia Pacific, according to him, was reacting faster to the market changes than anybody else.
“It is just the beginning,” admitted Wang, who has expanded Marriott’s portfolio from 16 to 560 hotels across the continent and is currently overseeing 600 hotel projects in varying stages of completion. “However, summits like these will help understand what Marriott designing is about, all our brands, the segmentation, with tools of hotel design, and this will rapidly start increasing the number of architects and designers in India who can start to support us.”
The audience ranging from hotel developers and owners to project heads and project management consultants to architects, interior designers heard Wang in rapt attention as he succinctly explained the “direct correlation between a strategy hotel versus a hotel that does not follow design standards.” Owners who develop hotels within budget and within strategy do much better on RoI, he said flatly as he spoke at length on Marriott’s brand design standards across its 30 brand portfolio and what goes into the making of a world-class hotel experience with a best-in-class design philosophy.
“At Global Design, we set the guidelines, we set brand compliance and we help owners achieve project milestones till the hotel is ready for opening,” added Vikram Choubal, Vice-President, Global Design, Marriott International, highlighting the sheer scale of the global chain that boasts 1.2 million rooms worldwide, across 30 well-defined and distinct brands.
In an exclusive interview on the sidelines of the event, Wang spelled out what it took to create the unique brands, design world-class hotels and come up with great strategies that has set standards.
Excerpts from the interview:
What is Marriott’s strategy to penetrate into the unorganised sector in India?
Marriott’s strategy regarding individual owners and smaller owner operated hotels is really about showing them the potential they could have in tapping into Marriott’s marketing and global platforms, with 100 million customers and members. We have a strong reservation system. The online travel agencies (OTA) can typically end up charging the owner up to 25% for the booking; a quarter of your profit goes straight into the OTA even before the guest checks in. With the small owners, it is easy to convince them that they can be part of the biggest hotel company and tap into our systems that would reduce their costs and increase their profits for rooms. Also, they can equalise their ups and downs in business. While during peak time they can do well on their own, during the low season they can have much better average daily rate; they can reduce the peaks and valleys, improve room occupancies. That will give them much better returns and secure investment overall.
What is Marriott’s approach to conversion from other brands when a hotel is already built?
There is no better way and no quicker way to grow our company, portfolio and hotels than to tap in to conversion of existing hotels. That is our number one initiative across Asia for this year, and the next few years. We love conversions and we want that to happen quickly. In fact, it helps owners who are suffering because of the high cost of OTA, and trying to figure out ways to manage their own hotels. Managing a hotel is science; it deals with training human beings. So for us, conversion is a great opportunity and it can add to our multiple portfolios and brands.
One of the big challenges is to make those hotels meet us on strategy and meet our brand standards. That is the hardest part of the conversion. That’s where Marriott needs to be more creative, sharpen up our pencils, be more focused on prioritising the critical things that are needed to meet brand standards and some of the things that we can let go. We give priority to things that are guest facing and for things that guests couldn’t tell the difference; we may defer that part of the work for after opening and after rebranding. For instance, fire protection and fire safety is one area where we have zero tolerance and there can be no compromises there at all.
What is Marriott’s view of Air BnB? Won’t it affect your existing owner relationships and market share?
Air BnB is here to stay and they will only expand. Marriott has been keeping an eye on them, but we need not necessarily react to them. As we see them getting into prototype packages and making a strong investment vehicle out of it, we need to figure out what is making them successful in this kind of commodity leasing business. We have to play up the weakness of Air BnB. For instance, security is a challenge for them. We hear about cameras in the rooms, which can be a big issue for women travellers.
We are human beings. We like social interactions. That’s one thing Air BnB does not have. With hotels, our focus is to create social zones, interaction between guests, play that up, play up the security piece and the service piece and focus on what we have been doing well – which is business, corporate and MICE customers. Let Air BnB focus on the small leisure travellers, and let us do what we do really well, which is focus on corporate business.
How important is design for the bottom-line and does it have an impact on profitability of hotels?
We know from our studies over all the hotels we have done and in my 22 years of managing Asia Pacific, we have opened 670 hotels and 23 brands in 25 countries in the continent. There is a distinct difference between a strategy hotel versus a hotel that does not follow design standards in terms of RoI. We ensure that the owner picks the right fit. Whenever the owner has a strong personal opinion, we end up with a product that is not as per our requirement, and we can see that the RoI for the owner will not be as good as for an owner who trusts Marriott recommendation in that the brand standard is asking for what is appropriate – not to spend too much, not to spend too less. Hotels that are built to design within budget and within strategy do much better on RoI in Asia Pacific and around the globe.
It’s always a challenge for architects and project teams: who should they design the hotel for – the owner, the operator or the guest?
I think it’s a real balancing act. That’s where all of our EQ comes to play, between owner, operator and designer. But one thing is for sure, we are designing the hotel for the guest. The brand is really just the stage and the background to accommodate those specific guest profiles that we have studied for particular brands. It is not haphazard. It’s based on extensive studies, lot of interviews, lot of consumer insight about the brand and its segmentation of the customer. We know each brand, what customers are its majority users, their likes, their dislikes and it is really about making sure that those customers feel that the brand fits their lifestyle. It’s not about owner, it’s not about operator – the operator is only the ambassador to protect the brand and protect the customer.
Based on your experience, what kind of design mistakes you would urge hotel owners and their project teams to avoid?
Many different levels of mistakes have great consequences. From the investment point of view, it is when an owner tries to overbuild, which can cause RoI to extend by many more years. It may not be bad for the brand, but certainly hits the owner. That’s where the owner needs to trust Marriott to make sure that we stick to the design brief.
The other part is related to durability. With a hotel, you are running a factory and, for that, the durability of materials, equipment, fabrics, furniture, etc. needs to be able to withstand the wear and tear of heavy usage. Any owner that has the temptation of saying “I don’t want to buy the equipment recommended by operator but I will buy the cheaper one” is short sighted. You are going to end up with everything that’s not going to hold up and not last long, end up repurchasing and reinstalling many types of equipment, adding to the costs.
The owner needs to trust the designers. You don’t interfere; design cannot be done by a committee, design is one person’s vision. Marriott will hear comments related to functionality and service to have a very well-oiled machine, but we don’t want to change or manipulate the designer’s vision. It’s about the brand; it’s not about you and your taste. If you have great taste, do it at your house, not at the hotel.
And, lastly, the safety factor. We need to take great responsibility whenever we are doing anything, to protect the life of a human being. It is not about law suits; it is about protecting precious lives. We don’t want to take safety lightly and we don’t want the owner to take it lightly either.
Marriott designs so many hotels and you have guests experiencing those designs. Is all this data being studied to design the next hotel better?
This is all related to Big Data and data mining. All of this is at the forefront of technology and Marriott, like everyone else, needs to tap into that data mining so that we can maximise the use of our spaces and accommodate the customer’s tastes, likes and dislikes. There are built-in sensors, light fixers and devices in the ceiling of the hotel that can track movements, pick up information without affecting anyone’s privacy. The idea is to identity the hot zones, the areas that are most under-utilised, and in that case we can re-plant the movement, the layout of an F&B outlet or lounge or anything. This data helps us maximise space and revenue.
Tell us a bit about your new and upcoming projects.
With the sheer volume of projects coming through my team, the important thing is to focus on hotels that have great opportunities either because of location or brand. Perhaps, there is a specific brand that we need to tap potential or new brand that is a first in the city; those are the ones I am more interested in. If we do the first one in any city, that will become the anchor and talk of the town. That is very important for my focus. Any hotel that has a unique combination of location, owner, designer and brand can become the poster child, the halo for our brand and the company, and emerge as an iconic project for marketing and exposure.
For instance, the just launched Hangzhou Renaissance is absolutely the best Renaissance for Asia, or I may dare say, the best Renaissance in the entire world. It’s the poster child that I have been involved in. Great owner, great designer from Thailand working in China for the first time, great story for Renaissance location, beautiful narrative and it all hangs very well together. Great strategy, well-crafted, great F&B concepts – that’s my latest and greatest.
We have 80 hotels remaining to be opened this year alone. Every hotel we are opening is great in its own right. I am just looking forward to the next great hotel and the one after that and waiting to see the magic in each one of them.
When would we see an Indian designer on the Marriott panel?
That is a big focus of mine and one of the reasons for this summit. I am challenging my whole group and myself to explore all the great architects and designers in India so that they can support the local market, the local owners, create a communication – they know the local custom and design motifs much better than someone from outside. We want authenticity, we want great designs and the only way we can get that is from local designers who understand the culture and have that flair.
So why don’t we have more designers from India? Part of that is the lack of exposure to events like the one we just had. This is the beginning so that they can understand what Marriott designing is about, all our brands, the segmentation, with tools of hotel design, and this will start rapidly increasing the number of architects and designers in India who can start to support us.
There is nothing more important for Marriott right now than to get local designers and owners to assist us so that the consultancy is much better. There are talents here without doubt, but they just need a little bit of training and exposure to the Marriott way of doing hotels. Just a few more of these events and you and I are going to see the shift in seeing local designers not only in India but their reputation will expand to the rest of Asia and elsewhere.
Is there an accreditation programme for architects with Marriott?
For any architects who are willing to go through our design exercise, we can send them a standard hotel plan that has many issues and challenges and it is basically up to them to tell where the problems are and, secondly, can they propose simple diagrammatic solutions on the plan. If they score greater than 60% , then they are on our list.