For growth you have to embrace technology and be ahead of the curve, feels Craig Smith, president and managing director, Asia Pacific,Marriott International, Inc
INTERVIEWED BY BABITA KRISHNAN
You came back to Asia Pacific after being away heading the Caribbean and Latin America for two-and-a-half years. What are the changes in the industry that you have noticed?
The industry is pretty much the same, but our offices have gotten very large. One of the things that I was focused on was trying to continue decentralising our offices and work culture, since we need people on the field. There were the shifts in economies – Thailand, Japan and India. Thailand steadied, we saw double digit growth in Japan and India also came back. When I started working in India earlier, it was the glory days when hoteliers could do nothing wrong and then came the period of 3 to 4 years when we couldn’t do anything right. The owners were used to a 10-12% YOY growth that dipped to 5%. But now we are back in double digits, everyone is a hero again and I am happy to take credit for it, though I haven’t done a thing!
In spite of the downturn, Marriott has been steady in terms of both growth and pipeline.
I had a professor in business school who taught long-term sustainable competitive differentiating advantage, the whole theory behind it was that you have to be different and think long-term. Most companies think of short-term success for measuring bonus for one year growth, but it’s easy to ruin the long-term growth for short-term benefit. We teach our young managers that a company is like a table with four legs – profit, sales, guest satisfaction and associate satisfaction.
Everyone knows this, yet focus on profit, which results in the table falling over. One of the things that we started six years ago when I was CEO, and we became almost religious about it, was our balancing act. Under which, every year, the guest satisfaction, associate satisfaction, profits and sales have to go up by so many points and we measure every one of those tenaciously. So during reviews, we talk not just about what was done well, but on how it can be done better and how can the company help. All of this results in happy owners, who make up the top of the table. Today, we are probably the most favoured brand amongst the owners in India and it is thanks to this detailed plan and measurement system. We have rephrased the old saying that what gets measured gets done to ‘what is measured and gets publicised, gets done exponentially’. We realise that a balanced scorecard is essential to long-term success.
What are the expansion strategies that you adopted to fast track the region?
The first one is that we want to localise our talent. We are very proud of our Indian team because our Indian team is 90% local. Connected to that is the focus on female talent, which is underutilised and ignored in most countries and we think that we have a competitive advantage by finding and actually growing that female talent. We want our reputation to be the best and make sure that each individual hotel does well. It is probably the fastest way to grow since owners talk to each other. Many of our owners own multiple properties with us and that speaks volumes about our reputation as a brand.
How do you see the growth of the brand in India panning out in the next couple of years, specially as compared to China?
China and India have been our fastest two engines, but China has outpaced India and the reasons are common knowledge. But now many international companies are coming and putting equity in India. Also, India’s GDP growth is predicted to be faster and it will emerge from the shadow of China as the international forecast is of China growing at 5.5 to 6% a year and India at about 8.5% over the next decade. That is an incredible story. In demographics, India has a young, mobile, smart and hardworking talent as compared to China, which will have more people entering the retirement age, which means less people on the workforce. So, it is a very rosy picture for India and I’m bullish.
Comparing with others in the region, what could we learn from them and implement to help improve the Indian hospitality sector?
In terms of hotels and staff, probably not a lot. There is great food in India, great work ethic, great standards. I think what you can learn from other parts of the world is the regulations. The more rules you have the more people try to cheat and there is more room for corruption. It takes long to build hotels and it takes longer to get the permits, this is something that needs to change. I heard this phrase in Latin America and I think it beautifully sums this situation up, ‘the governments rolls out the red carpet to get investors and then they roll out the red tape to chase them away’. There are innumerable examples of this in India. These delays cause financial losses to the investors and the hurdles discourages investors which is a real cause for concern.
What are some of the industry trends that you see gaining prominence in the coming years?
Digital and social, everything is moving in that direction and is being done online. I am not even a millennial, but I do my banking, pay my bills, do my stock, answer emails, WhatsApp, Twitter, VChat, FaceTime, everything on the phone. People are making reservations digitally, buying homes, official reports, etc. so this is emerging as the most important business and leisure platform. The second part is social media that has evolved tremendously, where people don’t want just the opinions of companies, but of other people as well. You have the Trip Advisor, FaceTime, Facebook, and innumerable ones at that. Now you can aggregate information on likes and dislikes, etc., so social media is taking on. In the old days we had advertising, guest satisfaction and PR, now social media is combining all these under one head and making them work together. And this is going to become prevalent as we go along. It is like digital gossiping, and it is far reaching with instant response.
Technology and digitisation is penetrating our life, especially through the phone. In future, not only will you book through the app on your phone, you will come to the hotel, check-in on your phone, pay and get the receipt, do the expense report, etc. everything on the phone.
How will the market perception about the brand change with the Marriott-Starwood merger and what kind of changes that you foresee in the coming years?
I don’t think much about perception because the market actually looks at each brand individually. While some people are Renaissance, Ritz Carlton or Marriott guests, there are others who are W, Aloft or Westin guys. It is the same like cars. Overall, there has been a very positive outreach for the ownership in Asia Pacific as two of the most favoured groups are together now. Though it was the best-kept secret in the industry, it has taken so long to be finalised and will take more time to get its final shape. It is almost like a Bollywood movie. People are a little nervous about the SPG benefits, some about their jobs, which is natural. But as things iron out, the picture is sure to become clearer. The biggest positive for the associates is that they will be part of the world’s largest hospitality company and that is an advantage. The opportunity for them to grow is phenomenal.
