Outbound travel in China is booming. This year, Chinese consumers will take 150 million trips—15 million more than last year—and that number is expected to jump to 700 million trips over the next five years. Today, Marriott took significant steps to capture this growing market—the global hospitality company announced a joint venture with Chinese e-commerce giant, Alibaba Group, to build loyalty among millions of Chinese consumers and enhance their travel experiences.
Marriott Global CCO Stephanie Linnartz told LODGING that the company has had a relationship with Alibaba for some time. Marriott’s hotels were listed on Alibaba’s travel service platform, Fliggy, and the company had begun rolling out Alipay at select Chinese and Asia-Pacific properties, making it possible for Chinese consumers to use the digital wallet to pay for their stay. “This new venture is a significant step and a really big jump forward in our relationship with the biggest e-commerce player in China,” Linnartz adds.
As Chinese middle-class incomes have risen, so too has the demand for higher quality travel experiences domestically and abroad to the United States and Europe. The new venture will manage Marriott’s storefront on Fliggy and market the hospitality company’s global portfolio to the more than 500 million mobile monthly active users across Alibaba’s platforms. The venture will also link the two companies’ loyalty programs, a move that Linnartz says is poised to significantly increase the current membership count for Marriott’s loyalty programs—Marriott Rewards, The Ritz-Carlton Rewards, and SPG.
Marriott and Alibaba’s joint venture announcement comes a day before Alibaba’s Membership Day on August 8, during which Marriott will offer special promotions to Chinese travelers and the opportunity to enroll in loyalty programs. “We believe the opportunity to greatly expand the number of people in our loyalty programs with a partner like Alibaba is significant,” Linnartz adds.
The venture will also support Marriott with content, programs, and promotions catered to Chinese travelers. Marriott’s owners and franchisees across the globe are expected to benefit from the opportunity to capture a greater share of the growing Chinese travel market. “Chinese travelers are venturing beyond big travel in China, and beyond even the Asia-Pacific region into the U.S. and Europe. Getting a disproportionate share of that marketplace is obviously the biggest win [for owners and franchisees],” Linnartz explains, noting that owners and franchisees will also see lower costs as a result of more people booking through the Fliggy platform as opposed to other third parties.
The joint venture’s user-friendly technology aims to integrate planning, booking, paying, and managing a trip, including activities like shopping, dining, and sightseeing. Wallet-free travel through Alipay will open doors for Chinese consumers to pay for Marriott hotels. While Alipay at Marriott properties is currently just available in select Asia-Pacific regions, Marriott is expecting to expand Alipay worldwide, specifically at hotels in key U.S. and European markets, which Linnartz says will be a real differentiator. “Being able to pay the way you want to pay is critical to all consumers, particularly in the case of Chinese consumers—Alipay is the main way they pay through Alibaba and 80 percent of e-commerce is done through Alibaba,” Linnartz adds.
The joint venture will also create crossover loyalty program benefits to further integrate Marriott’s and Alibaba’s loyalty programs. Consumers will be able to exchange and redeem points and match status across the programs, as well as take advantage of personalized, data-based promotions.