In a one-on-one interview with TheStreet’s Scott Gamm, Marriott’s CEO Arne Sorenson shared his views on a potential Sino-American trade war, his thoughts and hopes for the Chinese tourism market, as well as Marriott’s joint venture with Alibaba in China. With Marriott heavily investing in the Chinese market and launching high-profile ventures in the country, it goes without saying that Sorenson has a bullish view on China.
“We are very optimistic about China,” Sorenson said about Marriott’s China business. “China, in our business, is a travel business principally for Chinese travelers,” Sorenson explained before elaborating that even in “China’s most international city”—Shanghai—most of the company’s guests are Chinese travelers.
“Chinese travel is obviously growing significantly as the Chinese economy moves towards more of a consumer economy. Both from within China travel, and Chinese travel abroad.”
To Sorenson, this underlines the importance of ensuring that Marriott’s brands are well-known and maintain a high reputation in the Chinese market. However, it’s not just about Marriott hotels being up-to-standard in China, but also about Marriott providing Chinese-friendly customer service—as it does in China—for Chinese guests at international properties.
Explaining Marriott’s partnership with Alibaba, Sorenson emphasized that the joint venture is a lot about improving the experience for Chinese travelers when they travel abroad, for example in terms of language, breakfast, and other services.
One such Chinese-oriented service is Alipay payments, which Marriott says that it will have rolled out at close to a quarter of its properties around the world by the end of the first half of 2018. The two companies have also rolled out a so-called flagship store on Alibaba’s online travel marketplace, Fliggy, which features some 600 Marriott properties in the Asia Pacific region.
On a fundamental level, Sorenson seems less-than-concerned about a potential trade war between the United States and China—primarily owing to his optimism about China.
“In some respects, that story won’t change even in a trade war. The Chinese will continue to move towards a consumer economy, they’ll continue to love travel, they’ll be interested in seeing the rest of the world,” Sorenson explains.
However, he concedes that they see risks associated with a trade war, particularly in terms of economic activity between China and the United States—with economic activity being a driver of travel.
Trade war or not, one thing seems to be for certain: Marriott sees a big future for China and wants to be a big part of that future, at least in terms of travel. If that means that it has to weather both its very own “separatism” storm and a Sino-U.S. trade war, so be it.