Alibaba Group Holding Ltd. (“Alibaba”) (NYSE: BABA) and Marriott International, Inc. (“Marriott International”) (NASDAQ: MAR) yesterday announced the establishment of a joint venture to redefine the travel experience for the hundreds of millions of Chinese consumers traveling abroad and domestically every year.
The joint venture will leverage Marriott International’s global portfolio of brands and unparalleled hospitality expertise to revolutionize the travel experience as well as Alibaba’s digital retail leadership and its role as a gateway for international brands to reach over 500 million mobile monthly active users across its platforms.
Drawing on resources from both Marriott and Alibaba, the joint 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 programs and Alibaba’s loyalty program, and support Marriott hotels globally with content, programs and promotions customized for the Chinese traveler.
As incomes rise, China’s middle class is looking for higher quality products and travel experiences. This new venture is designed to satisify consumers’ expectations for seamless, integrated, personalized, and convenient travel solutions that connect travelers directly to Marriott’s portfolio of international hotel brands.
The travel industry is an important growth opportunity as China’s travelers are expected to take an estimated 700 million trips over the next five years. Marriott’s owners and franchisees globally will benefit from the joint venture by capturing a greater share of this growing Chinese travel market and lower distribution costs associated with the joint venture.
“We are proud to join forces with Marriott International – combining our large-scale consumer base, leading-edge technology and consumer insights with their unparalleled hospitality expertise,” said Daniel Zhang, Chief Executive Officer of Alibaba Group. “Together, we are elevating and redefining the travel experience for Chinese consumers to be more seamless and personalized as they embark on adventures to discover the world.”
“We have long admired Alibaba’s digital expertise and deep understanding of Chinese consumers’ needs and behaviors,” said Arne Sorenson, President and Chief Executive Officer, Marriott International. “By forming this partnership, we are pairing our hospitality expertise with Alibaba’s digital travel plaform, retail expertise and digital payment platform, Alipay, and driving membership to our loyalty programs. With the growing number of Chinese consumers exploring new destinations, this venture will introduce our hotels worldwide to this new and growing traveling class.”
The joint venture will elevate the travel experience for Chinese travelers in the following ways: making global travel easy; personalized and VIP experiences; Wallet-free travel, next-gen loyalty, etc.
Making Global Travel Easy: The joint venture will provide newly-integrated functionality to make the entire travel experience truly frictionless from planning, booking, paying and managing a trip to all of the acitivities associated once at the destination like shopping, dining and sightseeing. The joint venture will deliver user-friendly technology solutions that will open up a world of travel options for Chinese consumers.
Personalized and VIP Experiences: The joint venture will leverage technology to curate customized experiences for Chinese consumers. Marriott will offer access to private concerts, family-focused experiences, and court-side seats at sporting and other events through its Starwood Preferred Guest (SPG) Moments and Marriott Rewards Moments programs. Eligible members from Alibaba’s loyalty program will benefit from personalized hospitality programs and Marriott’s award-winning SPG ambassador program.
In addition, in celebration of Alibaba’s Members day on August 8, Alibaba members will be able to enroll in one of Marriott’s loyalty programs – Marriott Rewards, The Ritz-Carlton Rewards or SPG – and book exclusive Member Rates through one of Marriott’s digital channels, beginning immediately.