Dive Brief:
- Marriott International is planning another year of significant tech spend as the hotel company makes inroads on its multiyear digital transformation plan.
- “We still expect to begin rolling out our new cloud-based systems to properties next year,” President and CEO Anthony Capuano said during the company’s Q1 2024 earnings call Wednesday. “In the meantime, we're enhancing the digital experiences that matter most to customers, primarily how they shop and book through our channels.”
- Full-year investment spending is expected to reach $1 billion to $1.2 billion, representing a higher-than-historical investment in technology for the company, CFO and EVP of Development Leeny Oberg said during the call. Marriot expects the vast majority of the tech spend will be reimbursed over time. Capital and technology expenditures totaled $109 million during Q1 2024.
Dive Insight:
As hoteliers and travel companies strive for better experiences and more efficiency, leaders are turning to AI for a host of tasks, from reducing food waste to improving internal operations.
Marriott created an AI Incubator last year. More than 150 use cases were submitted from across the company, Peggy Roe, EVP and chief customer officer, responsible for developing customer experience through data, AI and innovation, said during a security analyst meeting in September.
Roe said Marriott expects AI to help the hotel industry moving forward in three key areas:
- Accelerated content generation.
- Elevated customer experience.
- Augmented intelligence for our associates.
The World Travel and Tourism Council urged travel and tourism companies to embrace AI as a strategic priority, according to two reports released in tandem with the United Nations General Assembly in April.
Marriott has launched several internal pilots, including AI-powered virtual assistant RenAI. The concierge program for its Renaissance brand delivers relevant, local recommendations via a chat interface, according to Roe.
Marriott’s AI explorations center around freeing employees to focus on core job functions, such as curating better experiences for guests. The company says initiatives are still in early implementation stages.
“Over time, we will certainly explore every opportunity we have with AI to enhance operating efficiency, but I don't think we've made any material assumptions in the model we presented today that AI is going to drive X basis points of enhanced operating efficiency,” Capuano said during the security analyst meeting.
As AI experiments unfold, the company is re-platforming systems and investing in its technology infrastructure, like many other enterprises in the industry.
Choice Hotels International powered down its last on-prem server last year as the company completed a lengthy AWS cloud migration. In March, Four Seasons Hotel and Resorts appointed Sudhakar Veluru EVP and chief information technology officer in a move the company said underscored its commitment to modernizing and strengthening its technology standing.
