ALIBABA GROUP and Marriott International will be teaming up in a digital partnership intended to transform the face of travel for Chinese tourists, by leveraging on the power of Alibaba’s vast e-commerce consumer base and Marriott’s hotel network.
The two companies announced on Monday their joint venture would crisscross the networks of both parties, pulling together resources onto platforms that will streamline and upgrade the travel experiences for the millions of Chinese tourists that have lately flooded the world beyond their home country.
According to China Business Review, the country’s outbound market is expected to triple the size of Japan’s by 2020, signaling a huge opportunity for hoteliers and travel industry players.
— Sunny Hoi (@SunnyHoi) August 7, 2017
The partnership will focus on bringing Alibaba’s technological know-how to Marriott’s hotel services. Alibaba’s massive consumer base will provide Marriott with in-depth knowledge about customers’ habits and preferences, allowing them to create highly personalized experiences from within the Marriott brand.
According to a statement published on Alibaba’s news site Alizila, the venture will produce customizable trip-planning services, VIP travel experiences and exclusive benefits for preferred customers. Marriott hotels will also begin accepting Alipay as a central form of payment.
“Together, we are elevating and redefining the travel experience for Chinese consumers to be more seamless and personalized as they embark on adventures to discover the world,” said Alibaba Group CEO Daniel Zhang in a statement.
Alibaba’s travel service Fliggy will manage Marriott’s digital presence on its platform, as well as the hotel’s Chinese-language digital channels, including Marriott.com and Starwoodhotels.com, as well as their mobile apps, Mobile Marriott and SPG. Alibaba will be responsible for handling content production, programming and promotions operations targeted at Chinese travellers.
Alibaba’s movement into the travel space is just the latest in the e-commerce giant’s long history of diversification. Their portfolio of investments today includes ride-hailing services, grocery delivery services, autonomous cars, artificial intelligence, fintech and luxury commerce. The move into the tourism industry could be a calculated one for Alibaba, as it’s largely still a nascent market.
China’s many technology titans have been rapidly expanding into various industries to keep their customer bases locked into their respective ecosystems. Online travel is merely the latest industry China’s mega-corporations are fighting over. Fliggy is in a battle with Tencent-backed Meituan Dianping, and both companies are still struggling under the industry dominance of Ctrip.
Marriott will benefit from Alibaba’s deep insight into the Chinese demographics it is currently lusting after. Young Chinese travelers, a sector of the population that is only getting richer, make up the bulk of China’s outbound industry. According to Alizila’s blog post, young Chinese travelers are increasingly looking for more sophisticated travel experiences rather than quick shopping trips, which means Alibaba’s move is well-placed to succeed in today’s environment.
“With the growing number of Chinese consumers exploring new destinations, this venture will introduce our hotels worldwide to this traveling class,” Marriott International president and CEO Arne Sorenson said in a statement.
Marriott’s partnership with Alibaba will gift them with deep insights gleaned from Alibaba’s 500 million strong mobile consumer base who use their many e-commerce platforms and its popular payment platform Alipay.
Through the integration of both companies’ services and big data operations, Alibaba and Marriott will be able to more effectively create packages and programs that will appeal to their customers. It’s the ultimate step in building great user experience, through next-generation loyalty programs, and private events and perks for members of each companies’ clubs.
The travel industry in China is complex, unregulated and daunting – by embarking on it together, Marriott and Alibaba are laying the groundwork for other travel industry players to begin leveraging the power of technology.