View from the C-Suite: Marriott finds Marriott finds China's middle ground

As some of the world’s most powerful countries close down their borders and tighten immigration policies, numerous multinationals are urging the opposite. Marriott International’s Craig Smith, managing director of the hotel giant’s Asia-Pacific operations, sees the benefits of crossborder movement first-hand, working on the frontline of the booming Asian travel and tourism industry.

“One thing I learned growing up is that nothing drops the barriers of prejudice faster than people visiting other countries,” says Mr Smith. The son of a US diplomat, Mr Smith has lived in 13 countries and speaks several languages. Now heading Marriott’s expansion in Asia, overseeing more than 180 hotels and 49,000 employees, he is working to capitalise on the rapid growth of both Asian tourism and China’s middle class. 

According to the World Travel and Tourism Council, tourism’s contribution to world GDP outpaced the global economy for the sixth consecutive year in 2016, rising to a total of 10.2%. The industry’s growth is projected at 3.9% annually over the next decade.

Multiple levels

“What we love about tourism is it really helps every level of the economy,” says Mr Smith. “When we open a hotel or resort, we hire people with very limited levels of education all the way up to people with master’s degrees. We bring in money to the local economy. And the people we hire, we train. They have the ability to grow their careers – we give them upward mobility.”

Thanks to China’s growth, a demographic has arisen with income to spare. “You’ve got what is now the largest middle class in the world,” says Mr Smith. Some 109 million Chinese are in the country’s middle class and are travelling from the country in droves. “The biggest evolution we’ve seen is that it used to be all about the purchase of goods – designer handbags and so on – but now, like Westerners, more Chinese travellers value experiences over goods.” This could mean anything from hiking in Borneo to scuba diving in the Maldives.

But even the product of an international foreign service childhood knows that nothing beats local expertise. “I want our China team to be Chinese, not Westerners running it, because we will never understand China like the Chinese,” says Mr Smith. This was part of the impetus for Marriott’s massive joint venture with Chinese e-commerce giant Alibaba, pairing the hotel group’s hospitality expertise with a localised online service experience. “It is a digital empire. It has 500 million members,” says Mr Smith. “Alibaba knows the Chinese clients better than we do, and we know the service industry better than it does. How can we merge these to create seamless travel for Chinese travellers?”

Global meets local

The project will market directly to Alibaba’s customer base, link the loyalty programmes of Marriott and Alibaba, and provide Marriott hotels with locally customised promotions and websites. “We said, let’s map out the Chinese experience and look at how we’re making sure we take care of each touchpoint,” says Mr Smith. This includes everything from enabling Chinese digital wallet payments to making sure slippers, tea and traditional Chinese breakfasts are provided at the hotel.

“Our biggest internal challenge is the ability to marry the global to the local,” says Mr Smith. This is about culture: more than food or language, it is about how business is done, he adds. “In these parts of the world, everything is about relationships. Here, most people have never even seen my office. Everything is done over a meal. We are a very American company in how we do things, so it can be an internal battle.

“Governments and countries need to think of themselves like companies, like they are competing,” says Mr Smith. “Foreign capital is so fluid that if you can get a better return from another country, that money moves and becomes direct investment in another country overnight. It’s the same thing with tourism.” Further openness and competition is the key to growth, he concludes, saying: “Borders are too fluid today, with travellers, and with finances, for countries not to see themselves that way.”