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Hospitality Industry: Case Study & Research

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  • 0:04 Introduction to Marriott Moxy
  • 0:42 Marriott's Challenge
  • 2:33 Marriott's Response
  • 4:00 The Outcome of the Moxy Brand
  • 4:51 Lesson Summary
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Lesson Transcript
Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

The hospitality industry provides many examples of businesses navigating challenges to keep their company on the cutting edge. In this lesson, you'll learn more about Marriott and how they're fighting back against their competitors.

Introduction to Marriott Moxy

The hotel industry, a subsection of the broader hospitality industry, faces internal challenges and external threats on a daily basis. One of the more recent problems the industry has been confronted with is the introduction of new resources and providers of lodging for interested travelers looking to broaden their horizons without breaking the bank.

As a result, Marriott and others in the traditional hotel industry has had to think fast in an effort to keep up. In this lesson, we'll dive deeper into a case study of Marriott's efforts, a new chain called Moxy, take a look at their approach and analyze how successful their efforts have been.

Marriott's Challenge

Airbnb, a travel accommodation provider, entered the hospitality industry in 2008. To date, they have served more than 60 million guests in nearly 200 countries. A private company, Airbnb is valued at well over $10 billion and has been a huge disrupter of the traditional hotel industry.

Their strategy is designed to provide unique travel experiences at any price point across the globe, allowing regular people to share their extra space with an audience of eager travelers. Airbnb functions much like a community marketplace, such as eBay, where accommodations are listed for guests to peruse and then book from the privacy of their home. So, whether you're looking for an apartment in Boston or a castle in Munich, chances are Airbnb will have you covered.

A consulting firm analyzing the impact of Airbnb on the hotel industry determined that hotels are losing $450 million annually in direct revenue to the vacation rental site. Those revenue losses affect not only sleeping rooms at hotels, but bars, restaurants, spas and other services that are losing money from customers opting for an Airbnb experience over a regular hotel experience.

Experts agree that Airbnb's model, which allows lodging listings with minimal overhead for the company, succeeds because of its much wider range of products, from an apartment to a beach house, and focus on existing housing inventory, instead of regular hotels that must build new locations. Particularly popular with the millennial crowd, travelers age 18 to 34 as of 2017, Airbnb has managed to tap into the largest group of travelers today who take vacations at a rate ten percent higher than other age groups. Airbnb's travelers want an experience as opposed to functional lodging accommodations.

Marriott's Response

In an attempt to compete with the shift toward travel atmosphere over basic functionality, Marriott, one of the world's largest providers of travel accommodations, introduced a new brand to its portfolio called Moxy Hotels. Moxy's global brand director calls the chain 'a boutique hotel with the social heart of a hostel.'

Launched in 2015, Moxy targets young travelers with amenities including:

  • Communal spaces
  • A bar check-in (as opposed to a traditional front desk)
  • Fast and free wifi
  • Affordable rates
  • Branding, color schemes and layouts that are hip, such as floor-to-ceiling art
  • Space-efficient rooms
  • All-night cafes

With features designed to appeal to the Airbnb crowd, Marriott's Moxy brand is hoping to compete for millennials' travel dollars. By appealing to millennials first, Marriott is trying to position itself as the first choice for the younger demographic while building on their loyalty for personal and business travel later in life.

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