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Here’s a riddle: If a hotel chain relies on a solid reputation for reliability, what’s the point of providing luxuries that customers consider unnecessary? The answer, according to the Marriott chain, is that there is no point.

In the modern economic environment, Marriott is focusing on what matters most to guests. Many hotel consumers just step on the newspapers delivered to their doors, without ever picking them up to read. The various Marriott brands—including Courtyard, Residence Inn, Fairfield Inn, and the Ritz-Carleton—therefore have discontinued deliveries of approximately 50,000 papers daily. The cost savings enable Marriott to avoid massive layoffs, which supports its core value of taking care of employees and thereby encouraging them to treat customers well.

Facing declines in revenues per available room (a metric similar to same-store sales) of 17 percent in the first three months of 2009, the company also turned to creative alternatives, such as serving irregular bacon slices, as opposed to uniform cuts, to save $2 million. The switch to Edy’s brand ice cream, instead of Haagen-Dazs, saves money and facilitates employees’ jobs, because the less dense dessert is easier to scoop. Yet even as it cuts costs, Marriott recognizes the need to attract more customers, so it offers free nights and discounted rates, including $85 inMedan,Indonesia, and $120 at a casino and beach resort inCuracao.

To avoid negative repercussions from these cuts, Marriott wants to enhance the customer experience in other ways, such as making lobbies more inviting. Called “Great Rooms” by the chain, these hotel lobbies provide free Wi-Fi and modular furniture that can be arranged to encourage meetings, socializing, or casual dining. The hotel also hopes that while they chat or meet, guests might purchase a latte or a glass of wine from the hotel’s cafe.

Discussion Questions:

  1. What cost savings have Marriott pursued?
  2. What is Marriott simultaneously doing to enhance the customer experience?

Marc Gunther, “Marriott Gets a Wake-Up Call,” Fortune, July 6, 2009.

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