Introducing Marriott China Observer

(Photo by Przemek Pietrak / via Flickr – CC BY 3.0)

Welcome to Marriott China Observer. This website provides on-going research and analysis on Marriott International’s activities in China, the world’s second-largest economy.

If you are an investor in Marriott International, an analyst reviewing Marriott stock, or an international business observer, you already know that China is a critical market for the global hospitality industry: China is the world’s biggest spender on international tourism and is poised for greater growth.[1] According to Lodging Econometrics, China accounted for a full 20% of the global hotel development pipeline.[2]

Marriott’s growing footprint in China is key to capturing domestic and international Chinese travelers. “A big goal of expanding in China is making domestic travelers familiar with Courtyard, Marriott and our brands,” said Craig Smith, Marriott’s president for the Asia Pacific region.[3] By acquiring Starwood, Marriott vastly expanded its offerings in Greater China – the deal lifted Marriott’s hotel count by 170% to 264.[4]

This website provides due diligence on Marriott’s progress in China by following Marriott’s in-country partners, accessing Chinese-language media, and assessing the company’s plans and promises compared to its experiences on-the-ground.

Marriott has bet big on China – has it already stumbled?

Marriott has placed a big bet on China, which is the company’s largest single market outside of the U.S.[5] At the end of 2017, Marriott had approximately 100,000 rooms in China, and another 87,400 more in their Chinese development pipeline – 19% of the rooms in Marriott’s global development pipeline.[6]

Marriott has recognized that China is critical to its future as a global hospitality company. In 2016 Craig Smith, Marriott’s president and managing director for Asia-Pacific, reported that China was Marriott’s second-largest source market globally, and predicted it would reach number one in a few years.[7]

While Marriott’s analysis of the importance of the Chinese market seems sound, the company has encountered unexpected headwinds in its efforts to realize its Chinese ambitions.

After an incident in which Marriott referred to Taiwan, Tibet, Hong Kong, and Macau as countries separate from China, China’s Cyberspace Administration demanded that Marriott temporarily shut its website and mobile app to Chinese residents.[8] Marriott released an apology for the incident that acknowledged the company’s reliance on China: “As a company, we take very seriously the privilege and opportunity we have to serve guests in countries around the world – and particularly in China, a market we have been in for over 30 years.”[9]

Craig Smith said of the incident, “This is a huge mistake, probably the biggest of my career.”[10]

The “mistake” has been consequential. (In our next post, we will delve deeper into the incident and its impacts on Marriott.)

Investors deserve to know what risks Marriott faces in China

The fallout from this ‘mistake’ came in the context of rising tensions between the US and China over international trade which escalated into a trade war.[11]

Particularly in the current international trade environment, investors and analysts need more information to assess the strength of Marriott’s foothold in the world’s second-largest economy. The goal of this website is to help answer the following questions:

  • Does Marriott have the cultural competency to avoid additional incidents like the January website shutdown?
  • Is Marriott partnering with the right individuals and institutions in China?
  • What risks do Marriott’s partnerships in China pose to its ability to do business there?
  • Is Marriott growing fast enough in China? Are they growing the right brands in the right places?
  • Is Marriott’s current senior leadership up to the task of executing a politically and culturally sensitive growth plan?


[1] Oliver Smith, “The unstoppable rise of the Chinese traveller – where are they going and what does it mean for overtourism?” The Telegraph, 4/11/18.

[2] “The Top World Regions and Markets for Hotel Construction,” Lodging Magazine, 3/8/18.

[3] Shawn Tully, “Why Hotel Giant Marriott Is on an Expansion Binge as It Fends Off Airbnb,” Fortune, 6/14/17.

[4] Shawn Tully, “Why Hotel Giant Marriott Is on an Expansion Binge as It Fends Off Airbnb,” Fortune, 6/14/17.

[5] Sean McCracken, “5 things Marriott’s Sorenson has to say about hotels,” Hotel News Now, 6/20/17.

[6] Marriott had approximately 100,000 rooms in China based on 8% of 1.25 million total global rooms, and approximately 87,400 pipeline rooms in China based on 19% of 460,000 total global pipeline rooms. “Marriott International Marks 2017 as Year of Historic International Expansion,” Marriott News Center (press release), 1/19/18.

[7] Jennifer Lo, “Marriott gets a boost in Asia-Pacific after Starwood deal,” Nikkei Asian Review, 9/24/16.

[8] Wayne Ma, “Marriott Makes China Mad With Geopolitical Faux Pas,” Wall Street Journal, 1/11/18.

[9] “Statement from Arne Sorenson, President and CEO, Marriott International, Inc.,” Marriott News Center (press release), 1/11/18.

[10] Xu Junqian, “Marriott announces ‘rectification plan’ to regain trust,” China Daily (via Google cache), 1/18/18 (retrieved 4/11/18).

[11] See Ben Otto et. al., “U.S.-China Trade-War Crossfire Threatens Asia,” Wall Street Journal, 3/27/18.