The Marriott is certainly not a new name to guests visiting the city of Myrtle Beach. The Myrtle Beach Marriott Resort & Spa at Grande Dunes is considered the city’s best hotel property by far.
Guests who travel to our town consider the Marriott name among the newest and most innovative for travel. Most Millennial and Gen Z guests are not aware, however, that the company is more than a 90-year-old organization.
With its $1.3 billion purchase of Starwood Hotels & Resorts in 2016, the company’s portfolio grew to 30 different hotel brands making Marriott the largest hotel company in the world.
What caught our attention, however was Boston.com blogger Linda Laban’s June 2, 2019 article about the launch of Homes & Villas by Marriott International.
The article quoted Stephanie Linnartz, Global Chief Commercial Officer of Marriott. Linnartz’s remarkable insight sent our research team into digging up all we could about this talented leader. We quickly learned that Mrs. Linnartz is extremely impressive. Innovation is certainly in her DNA.
Her boss is no slouch either. Chief Executive magazine (https://chiefexecutive.net) announced in April that Arne M. Sorenson, the President and Chief Executive Officer of Marriott International, has been named 2019 Chief Executive of the Year by his peer CEOs. “I have tremendous respect for Arne Sorenson, for his global leadership and for his outstanding track record amid a very challenging marketplace,” said Marillyn A. Hewson, the Chairman, President and CEO of Lockheed Martin Corporation and 2018 CEO of the Year, who also served on the selection committee.
His achievement was sadly followed by news in May that Mr. Sorenson was diagnosed with stage 2 pancreatic cancer. We wish him a full recovery.
Why Marriott innovator Stephanie Linnartz is a game changer
Myrtle Beach property managers now stand at a business crossroads as to the future of their investor-client relationships, which our news team previously researched and chronicled.
Over the next 20 years, most all of the current 18,000 baby boomers who own ocean front condos in the city of Myrtle Beach will face end of life mortality. Myrtle Beach condo owners are the largest investors in the city of Myrtle Beach. Condo owners individually invested $1.8 billion in the city since the early 1980s. The entire local economy depends on these investors. No other investment group comes close to this level of investment.
Back to Back 3 mil tax increases
Sadly, the City of Myrtle Beach, working in collusion with 5 key local property manager families, view these investors as prey.
Practically all of these investors live in other states, and as such, can not vote in local elections. The City of Myrtle Beach charges these condo owners an annual $250 business license fee. The city is also in the process of passing two consecutive 3 mil tax increases with promised consecutive additional 3 mil tax increases over the next several years to come. Business licenses will go up this year to as much as $300 per condo owned for these investors as well.
In short, the city is tax funding 70% of its operating budget on these investors’ backs, as well as, the people who vacation in their investment condos.
How is that? Local residents who live in city of Myrtle Beach homes actually get a 75% tax credit on their property taxes paid for by tourists who visit the area. Investor condo owners do not get that tax credit even though the tourists are staying in their investment property. A 1% additional tourist tax is charged to tourists who stay in these condos. That tax brings in $24 million annually to the city, of which a portion is passed on in tax savings to local residents.
These condos, however, will soon be passed on to the Generation X, Millennial, and Generation Z children of these investors over the next few decades. Most all of Myrtle Beach’s oceanfront properties are filled with individually owned condos or timeshare ownership. Few hotel rooms are owned by the property managers themselves. Hotel rooms like those managed by Brittain Resort Hotels are all individually owned by boomers who do not live in S.C.
Marriott does the same in a variety of ways. However, Marriott does it radically and wonderfully better. In the audio below, Mrs. Linnartz speaks to the esteemed Mack Institute for Innovation Management Wharton School of Business. Listen to her innovative and refreshing approach to Marriott’s way of high tech and what she terms the importance of “high touch”.
The Stephanie Linnartz Marriott Approach is amazing.
Because of the collusion between local property managers and local governments, the five key, local, mom and pop property managers do not have concerns of competing against Airbnb or Homeaway. Some have stated, however, that this actually puts property managers at a disadvantage. Competition leads to better management and greater investment. Investment in Myrtle Beach has been marginal over the past decade.
Linnartz can be heard in the audio above speaking about Marriott’s size and innovation. “We got to that size and scale with the acquisition of Starwood Hotels and Resorts in late 2016. We were already quite a large global player, but we added more brands and more hotels with that acquisition. In terms of prioritization, we really tried to put the customer at the center of our prioritization efforts and think about what would move the needle with our customers. That can differ in various parts of the world, so we put that lens on it.
We do a lot of experimentation and testing of the new products and services in our hotels and the ways we’ll engage with our customers on our website or through our app. We believe very much in the idea of testing, experimenting, seeing what sticks with customers and what they love, then building out from there. Sometimes we have an idea that we think is going to be absolutely fabulous, we test it in a hotel or on our website, and it turns out we were wrong. Not being afraid to test and try and learn and fail and do it all over again is the way we think about things here.”
“It’s helpful when you’re able to test and try something on a relatively small scale. It is easier for human beings to let that idea go if it doesn’t work.” – Stephanie Linnartz
Stephanie Linnartz adds, “We get very wedded to our ideas and we don’t want to let them go. It’s helpful when you’re able to test and try something on a relatively small scale. It is easier for human beings to let that idea go if it doesn’t work, instead of investing so much time, money, and effort and the idea not working. It’s human nature that it’s harder to pull back from that.
Another thing that we do here at Marriott International is quite a bit of work with our partners. We try to learn from them and test with them. As an example, in the case of Asia Pacific in China, we have a joint venture with Alibaba. We are testing a travel platform for outbound Chinese travelers. Through that joint venture, we’re testing and trying a lot of different things to see what will stick with the Chinese consumer in terms of really getting them to travel to our hotels outbound. By working with different partners that maybe have skills and resources that your company doesn’t have, you can get to some interesting places.”
“The proof is in the pudding that people who take risks, who put themselves out there, get noticed and get recognized even if they don’t always succeed.” – Stephanie Linnartz
” What you have to do is celebrate when something doesn’t work and really mean that, not just say it. It’s easy to say you’re going to celebrate failure, but sometimes that doesn’t really happen. People watch what really happens. When someone gets promoted who has been out there experimenting and trying and everything didn’t work (but, of course, some things did work), people see that person get promoted or get that next big project. When people see that happen, the proof is in the pudding that people who take risks, who put themselves out there, get noticed and get recognized even if they don’t always succeed. We do a good job at Marriott International of doing that with our associates. “
The beauty of the depth of our brand portfolio is very much tied to the way people travel and are tied to our loyalty programs. Think about people and how they travel; I’ll use myself as an example. I travel for different purposes: I have children, I may be going to a lacrosse tournament somewhere in the middle of the United States, and I want to stay at a Courtyard. Then when my husband and I have a special anniversary weekend, we want to go to the St. Regis in New York. Then I might go to a big product launch for one of our partners at one of our bigger convention resort hotels.
People travel to different types of hotels at different price points with different offerings. The same customer travels across all of our brands. Interestingly, we see that for our most loyal Ritz-Carlton customers, the property and the brand they visit second is Courtyard, for the very reason in the example I just gave you. The data really backs that up. All of our 30 brands are part of our loyalty program, currently Ritz-Carlton Rewards, Marriott Rewards, and Starwood Preferred Guest. We have such depth in our portfolio. Maybe you’ll stay at some of our business hotels for your company’s work, but then you get to earn all these points that you then use for your family vacation.
You don’t have a strong portfolio without strong brands. The strength of our brands leads to the strength of our portfolio, which leads to the strength of our loyalty program. It’s all very interconnected in terms of how that works. I should point out, something about our portfolio brands that is especially compelling for loyalty is that we have eight superb luxury brands. When you earn all those points from all your business travel we have by far the deepest portfolio of loyalty properties around the world.”
Myrtle Beach sorely needs innovation
Myrtle Beach needs innovation. If rumors we have heard about Marriott are true, innovation could be the saving grace for our area as we transition from Baby Boomer investment to Gen X, Millennial, and Gen Z ownership.