Marriott’s Alibaba joint venture in China is part of its direct-booking strategy
About a year and a half after Marriott established a joint venture with e-commerce giant Alibaba in China, the collaboration is enabling the hotel giant to make inroads with a relatively new customer base — leisure travelers, a majority of whom are female and younger than 40.
And an official said the joint venture’s distribution model is breaking new ground for the chain.
Marriott considers its storefront on Fliggy, Alibaba’s travel division where it sells its global hotel inventory, to be a direct-booking channel with costs that are lower than going through online travel agency distribution, said Peggy Fang Roe, Marriott’s chief sales and marketing officer, Asia Pacific. Customers can pay for rooms using Alipay after their stays.
As with Marriott’s other brand.com websites, Alibaba users who access the Marriott storefront on Fliggy can take advantage of lower loyalty rates if they are program members. They can also earn both Fliggy and Marriott Bonvoy points.
Fang Roe is coy about the business model of the joint venture, which is based in Hangzhou, China, but said, “It’s fair to assume that hotels pay a small booking fee to fund the joint venture and its strategic objectives.”Unlike most Alibaba storefronts, which notoriously require foreign businesses to partner with third-party companies for implementation, Alibaba and Marriott International worked together using Alibaba technology to get the Marriott storefront up and running on Fliggy’s mobile app.
Most online travel agencies are preoccupied with hotel bookings. In the joint venture with Alibaba, however, Marriott is “looking at the end-to-end experience of a targeted member base and saying, How do we actually be more thoughtful about how we allow that person, that customer, to shop and book within an ecosystem they’re comfortable with?” Fang Roe said. “And how do we make the benefits more targeted and relevant to who they are?”