Why Your Organization Should Pay Attention to Marriott’s New E-Commerce Partnership

Author: David McMillin       

When Marriott CEO Arne Sorenson joined the Marriott earnings call on Aug. 7, he wasn’t dialing in from the company’s headquarters in Bethesda, Maryland. Instead, he was in Shanghai, a fitting place for the leader of the world’s biggest hotel company to announce another big move: a joint venture with Alibaba. As China’s most recognizable name in e-commerce, Alibaba has more than 500 million active consumers on its platform, and the new relationship gives Marriott opportunities to reach the growing number of Chinese travelers.

“The joint venture should enhance our service for Chinese guests when they arrive on property by enabling Alibaba’s digital payment system, Alipay, at key properties worldwide across our portfolio,” Sorenson said. “We also expect to broaden our offerings of guest amenities and services appealing to Chinese travelers to more hotels.”

Marriott has already been hard at work in building brand awareness in China. Last year, the company worked with Alibaba on a targeted marketing initiative that paved the way to 600,000 new Marriott Rewards loyalty members in just eight weeks. Marriott is competing for a prize that every hotel, airline, and online travel agent wants: a piece of the world’s largest source market for outbound travel. At the World Economic Forum earlier this year, Chinese President Xi Jinping estimated that Chinese tourists will make 700 million overseas visits in the coming five years.

Big Opportunities in the Business Events Sector

While hundreds of millions of Chinese citizens represent huge potential for outbound leisure travel, the opportunities inside China are equally promising — particularly for the business- events industry. According to a July 2017 report from market research firm IBISWorld, nearly 6,000 conventions and exhibitions will take place in China this year, and the convention and exhibition services industry in China will generate $5.2 billion. The growth of the Chinese middle class has fueled annual growth of nearly 10 percent for the industry over the past five years.

As the Chinese convention industry market matures, the rest of the world is paying close attention. PCMA is aiming to establish itself as an educational leader with its recent acquisition of Singapore-based Incentive, Conference & Event Society Asia Pacific (ICESAP). In early September, PCMA COO Sherrif Karamat, and Michelle Crowley, PCMA’s senior director of global strategy, will travel to Shanghai to join a group of Asia Pacific travel and events leaders at ICESAP’s Annual Conference. “The ICESAP acquisition puts us directly where some of our new customers are located, and it will make it easy for them to access and engage with PCMA,” Karamat said. “The ICESAP Annual Conference in Shanghai will reinforce our commitment to Asia Pacific and the role we believe business events will play in the economic and social progress of the region.”

Connecting With Chinese Attendees

China is a complex business environment. From figuring out how to work with the government (Uber gave up) to determining the best way to reach prospective attendees (Facebook is banned), there are big challenges that may overwhelm event organizers. However, overcoming those challenges can lead to serious opportunities to connect with an emerging generation of professionals searching for education and business connections. Sorenson penned a post for LinkedIn after the Alibaba announcement that summed up why every organization should put China at the top of their priority lists.

“Globally, the middle class is forecasted to see an increase of three billion people by 2031, with China leading the way,” Sorenson wrote. “While travel is already booming in China, it is estimated that less than 10 [percent] of Chinese nationals have passports. Imagine the potential for major growth that lies ahead as more Chinese join the ranks of the middle class and choose to travel.”

Imagine that potential for conference attendance numbers, too. If you’re looking for a starting point to navigate China, check out this Convene article on adapting to local business practices in Asia Pacific. And stay tuned to pcma.org for more insights from the ICESAP Annual Conference.

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