Alibaba, Marriott Team Up to Serve Chinese Tourists Abroad -- Update
August 07 2017 - 2:02PM
Dow Jones News
By Liza Lin and Chris Kirkham
Alibaba Group Holding Ltd. said it would team up with U.S. hotel
company Marriott International Inc. to expand its online-travel
footprint as more Chinese venture abroad.
Chinese consumers will be able to use Alibaba's travel-service
website and app to book rooms in the more than 6,200 hotel
properties world-wide that Marriott operates under such names as
Marriott, Courtyard, Ritz-Carlton and Sheraton, Alibaba said
Monday. They also will be able to use the same Alipay smartphone
payment platform they use at home when they stay in Marriott
properties abroad.
Marriott is based in Bethesda, Md.
Chinese e-commerce leader Alibaba, based in Hangzhou, is
expanding beyond traditional retail categories, such as clothing,
into entertainment and travel bookings as the Chinese appetite for
international travel rises in tandem with income.
Marriott executives said the joint venture, which involves
undisclosed investments from both companies, is aimed at getting
more Chinese consumers into Marriott's loyalty programs and hotel
properties across the world.
Stephanie Linnartz, Marriott's global chief commercial officer,
said in an interview that Alibaba's understanding of Chinese
consumer tastes will give the hotel company a market-share
advantage.
"They have significant customer data and insights on the Chinese
consumer," she said. "We're getting deep and rich into the psyche
of the Chinese consumers through this partnership."
Marriott already has a major presence in China, with more than
600 hotels that are open or in the pipeline. The company's
acquisition of Starwood Hotels Resorts Worldwide Inc., which closed
last year, helped to significantly boost its footprint.
The partnership with Alibaba also will help Marriott drive more
direct bookings to its hotels. Many of the world's largest hotel
chains have been trying to claw back business from third-party
travel sites run by companies such as Expedia Inc., Priceline Group
Inc. and China's largest travel website, Ctrip.com International
Ltd.
The sites bring in new customers but also add costs because they
take commissions of up to 30% for each booking.
Alibaba's latest tie-up throws a challenge to Ctrip, which in
November acquired U.K. travel search engine Skyscanner Ltd. During
the past year, Ctrip has also invested in three U.S. travel
operators and an Indian tourism website, seeking to position itself
as the first choice online for Chinese traveling abroad.
Marriott's Ms. Linnartz said bookings made through Fliggy,
Alibaba's travel website, will count as direct bookings to Marriott
properties. She said cost savings are a plus, but she added that
the main goal is to connect better with Chinese consumers through
personalized services at its hotels, such as ambassadors who speak
Mandarin or curated sightseeing trips organized through the loyalty
programs.
"We can bring things at the property level that have not been
done before," she said.
China's online travel-sales market is expected to be valued at
584 billion yuan ($87 billion) this year, up more than 20% from
2016, according to industry researcher Euromonitor
International.
Write to Liza Lin at Liza.Lin@wsj.com and Chris Kirkham at
chris.kirkham@wsj.com
(END) Dow Jones Newswires
August 07, 2017 13:47 ET (17:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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