What deal did Marriott make with Alibaba? An Explainer

(East Nanjing Pedestrian Shopping Street by David Leo Veksler – CC BY 2.0)

In August 2017, Marriott International announced a strategic partnership with the Chinese tech giant Alibaba. In its press release, Marriott claimed that the partners would redefine the travel experience for hundreds of millions of Chinese consumers.[1]

Western press mentions of the deal have repeated Marriott’s rosy predictions: for example, stories in the Wall Street Journal and hospitality industry outlet Skift only quoted Marriott and Alibaba executives.[2] [3] In this post, we break down what Alibaba is, and explain the components of the deal.

What is Alibaba?

 Alibaba, sometime referred to as the “Amazon of China,” is a Chinese tech conglomerate known for its online retail business.[4] [5] Fliggy, previously known as Alitrip, is Alibaba’s online travel platform. Fliggy was Alibaba’s third attempt to break into the Chinese online travel market.[6] The e-commerce giant’s other holdings included the Youtube-like Youkou, the South China Morning Post, one of Hong Kong’s most influential English language newspapers, and a major investment in social media service Sina Weibo, often referred to as the Twitter of China. [7] [8] [9]

The company also created the payment system Alipay in 2004, which was later spun-off into a separate entity named Ant Financial.[10] [11] Jack Ma, the founder of Alibaba, held 46% of Ant Financial and had voting rights on its board.[12] [13]

Joint Venture to Manage Marriott’s Chinese Web Presence

The Marriott and Alibaba deal created a joint venture responsible for operating Marriott’s flagship store on Fliggy.[14] Alibaba will eventually run Marriott’s Chinese-language websites and apps, according to Marriott’s Chief Commercial Officer.[15] As part of the deal, Marriott and Fliggy also launched a promotional shared reward program.[16]

This is not the first time that Marriott has established a shared reward program with a major OTA company in China. In 2012, Marriott announced a joint reward program with Ctrip, the largest Chinese OTA platform; the program expired in November 2017, three months after the Marriott-Alibaba deal.[17] [18] [19] The story of Marriott’s partnership with Ctrip, and its dissolution, will be discussed in a future blog post.

In January 2018, Marriott shut down its Chinese language websites on the order of government authorities after a survey listed Hong Kong, Taiwan, Tibet and Macau as countries separate from China.[20] (See our post explaining the fallout from this incident.) The survey had been prepared by a vendor from Canada.[21] As of April 16, 2018, Marriott’s Chinese-language webpage still doesn’t have a direct-booking feature; the webpage instead redirects visitors to other booking systems such as Marriott’s Chinese language smartphone app or its international website in English.[22]

Marriott announced that the joint venture would put an exclusive booking portal online the week of April 23rd, 2018.[23]

Marriott Hotels to Accept Alipay

A key piece of the deal is the roll-out of mobile payment system Alipay in select Marriott Hotels in the Asia-Pacific region. Marriott began accepting payment via Alipay in September 2015 at a small number of hotels in China.[24] Following the deal, Marriott has expanded acceptance of Alipay to more hotels across Asia.[25]

In January 2018, Alipay’s parent company Ant Financial issued an apology after it came under criticism within China for how it handled users’ data.[26] The controversy within China arose in January 2018 after users said they felt misled into allowing its Alipay service to share data on their spending habits with Ant’s credit-scoring arm and other third-party services.[27] A future post will cover this and other public incidents related to Alibaba’s handling of user data.

Alipay’s largest competitor is WeChat Pay, owned by the tech giant Tencent.[28]

Is the Alibaba deal an unqualified boon for Marriott?

Despite the laudatory press coverage, questions remain about the value of this deal to Marriott.

  • Why did Marriott decide to forgo its shared reward program with Ctrip for Fliggy?
  • How will Alipay’s customer trust controversy affect Marriott?
  • How will the Marriott-Alibaba relationship evolve, given Marriott’s dependence on its joint-venture with its OTA partner Fliggy for its Chinese web-presence?


[1] Marriott International (2017, August 7th), Alibaba Group and Marriott International Announce Innovative Joint Venture to Redefine Travel Experience, retrieved April 17th, 2018, http://news.marriott.com/2017/08/alibaba-group-marriott-international-announce-innovative-joint-venture-redefine-travel-experience/

[2] The Wall Street Journal (2017, August 7th), Alibaba, Marriott Team Up to Serve Chinese Tourists Abroad, retrieved April 17th, 2018, https://www.wsj.com/articles/alibaba-marriott-team-up-to-serve-chinese-tourists-abroad-1502103604?mod=searchresults&page=1&pos=3

[3] Skift (2017, August 7th), Marriott Partners With Alibaba to Court the Chinese Travel Market Even More, retrieved April 17th, 2018, https://skift.com/2017/08/07/marriott-partners-with-alibaba-to-court-the-chinese-travel-market-even-more/

[4] China Daily (2016, April 6th), Alibaba becomes the world’s largest retailer, retrieved April 17th, 2018, http://www.chinadaily.com.cn/business/tech/2016-04/06/content_24315726.htm

[5] The Sydney Morning Herald (2017, August 27th), ‘Amazon of China’ Alibaba already has supermarkets. Now it wants our food, retrieved April 17th, 2018, http://www.smh.com.au/business/retail/alibaba-already-has-supermarkets-now-it-wants-our-food-20170825-gy4aqf.html

[6] Jing Daily (2016, October 31st), Alibaba’s Alitrip Rebrand Reveals Big Bet on Chinese Millennial Travelers, retrieved April 17th, 2018, https://jingdaily.com/alibaba-abandons-alitrip-brand-and-bets-on-chinese-millennial-travelers-with-new-brand/

[7] TechCrunch (2018, April 19th), Report: Smartphone usage set to overtake time spent watching TV in China, retrieved April 24th, 2018, https://techcrunch.com/2018/04/19/report-smartphone-usage-set-to-overtake-time-spent-watching-tv-in-china/

[8] TechCrunch (2016, April 6th), Alibaba completes SCMP acquisition and removes the paper’s online paywall, retrieved April 24th, 2018, https://techcrunch.com/2016/04/05/alibaba-completes-scmp-acquisition-and-removes-the-papers-online-paywall/

[9] The New York Time (2013, April 29th), Alibaba pushes into social networking with Weibo investment, retrieved April 24th, 2018, https://www.reuters.com/article/net-us-sinaweibo-alibaba-stake/alibaba-pushes-into-social-networking-with-weibo-investment-idUSBRE93S0DA20130429

[10] Quartz (2014, June 16th), Alibaba has a new way of explaining its controversial Alipay spinoff, retrieved April 17th, 2018, https://qz.com/221635/alibaba-has-a-new-way-of-explaining-its-controversial-alipay-spinoff/

[11] Nikkei Asian Review (2018, February 8th), Alibaba to buy 33% of spinoff Ant Financial, retrieved April 17th, 2018, https://asia.nikkei.com/Business/AC/Alibaba-to-buy-33-of-spinoff-Ant-Financial

[12] Quartz (2014, June 16th), Alibaba has a new way of explaining its controversial Alipay spinoff, retrieved April 17th, 2018, https://qz.com/221635/alibaba-has-a-new-way-of-explaining-its-controversial-alipay-spinoff/

[13] Quartz (2016, April 26th), Alibaba’s financial spinoff is now the world’s most valuable private internet company, retrieved April 17th, 2018, https://qz.com/670303/alibabas-spinoff-financial-service-company-is-now-worth-as-much-as-uber/

[14] USA Today (2017, August 7th), Marriott, Alibaba partner to run Chinese travel site, retrieved April 17th, 2018, https://www.usatoday.com/story/money/2017/08/07/marriott-alibaba-partner-run-chinese-travel-site/544578001/

[15] Reuters (2017, August 7th), Marriott set to woo Chinese tourists with Alibaba deal, retrieved April 17th, 2018, https://www.reuters.com/article/us-marriott-intnl-alibaba/marriott-set-to-woo-chinese-tourists-with-alibaba-deal-idUSKBN1AN1JN

[16] Taobao, retrieved April 17th, 2018, https://market.m.taobao.com/markets/h5/Marriott/Fliggy/BABA/rule

[17] Xinhua (May 11th, 2017), Chinese OTA giant Ctrip reports strong Q1 financial performance, retrieved April 18, 2018, http://www.xinhuanet.com/english/2017-05/11/c_136273985.htm.

[18] Hospitalitynet (2012, March 2nd), Ctrip and Marriott International Take Next Step in Global Partnership, retrieved April 17th, 2018, https://www.hospitalitynet.org/news/4055118.html

[19] Marriott International, Marriott Rewards and Ctrip Partnership News, retrieved April 17th, 2018, http://www.marriott.com/marriott-rewards/earn/ctrip-partner.mi

[20] The Washington Post (2018, January 18th), China asked Marriott to shut down its website. The company complied., retrieved April 17th, 2018, https://www.washingtonpost.com/news/business/wp/2018/01/18/china-demanded-marriott-change-its-website-the-company-complied/?utm_term=.9130627011db

[21] The Wall Street Journal (2018, March 3rd), Marriott Employee Roy Jones Hit ‘Like.’ Then China Got Mad, retrieved April 17th, 2018, https://www.wsj.com/articles/marriott-employee-roy-jones-hit-like-then-china-got-mad-1520094910

[22] Internet Archive, retrieved April 17th, 2018, https://web.archive.org/web/*/http://www.marriott.com.cn/

[23] Xu Junqian, “Marriott, Alibaba to launch new booking portal,” China Daily, 4/18/18. http://www.chinadaily.com.cn/a/201804/18/WS5ad6a8f1a3105cdcf6518fee.html.

[24] Marriott International (2015, September 7th), Marriott International Welcomes Chinese Travelers with Alipay, retrieved April17th, 2018, http://news.marriott.com/2015/09/marriott-international-welcomes-chinese-travelers-with-alipay/

[25] Marriott International, retrieved April 17th, 2018, http://marriottrewardsapac.com/en/benefit/alipay

[26] South China Morning Post (2018, January 4th), Alibaba’s payments affiliate apologises for opting in users for credit scoring system, retrieved April 18th, 2018, http://www.scmp.com/tech/china-tech/article/2126772/chinas-ant-financial-apologises-over-alipay-user-data-gaffe

[27] Capital News (2018, January 5th), China’s Alibaba under fire over use of customer data, retrieved April 17th, 2018, https://www.capitalfm.co.ke/news/2018/01/chinas-alibaba-fire-use-customer-data/

[28] South China Morning Post (2018, January 24th), China moves further towards cashless society as payment giants Alipay, WeChat Pay gain ground, retrieved April 17th, 2018, http://www.scmp.com/business/companies/article/2130400/china-moves-further-towards-cashless-society-payment-giants