Page 1 of 3 Case Study - Scope Management at Marriott Hotels Author: Jeremy Spencley Marriott International - Marriott Hotels Marriott International, Inc. is an American multinational diversified hospitality company that manages and franchises a broad portfolio of hotels and related lodging facilities. Marriott is thought to have one of the most powerful portfolios in the industry, with 30 brands and 7,000+ properties across 131 countries and territories. Founded by J. Willard Marriott, the company is now led by his son, executive chairman Bill Marriott, and president and chief executive officer Arne Sorenson. It is headquartered in Bethesda, Maryland, in the Washington, D.C. metropolitan area. In 2017, Marriott was ranked #33 on Fortune's "100 Best Companies to Work For" list, its twentieth appearance on the list. In 2017 Marriott International had almost $23 Billion in revenue and employed over 177,000 people. The Threat For most of the last half century if a person was travelling to another city, it generally meant that they would be selecting a hotel in their destination city to spend the night. Hotel accommodations have long been the norm for business and vacation travelers alike for lodging. In the mid 90's a fringe segment of the market emerged where home owners could let their homes for short term accommodation to travelers. Vacation Rentals by Owner (VRBO) was among the first legitimate companies to exploit the niche. Since that time, technology and the ubiquity of the internet has allowed companies like Airbnb to push this segment of the market into the mainstream. It is now fashionable to stay in people's luxury villas, city-center condos, rustic cabins and any number of unique accommodations around the world. Researchers from Harvard Business School and the MIT Sloan School of Management calculate that Airbnb has cut hotel profits by as much as 3.7% in 2014 and are gaining market share. The traditional approach to this growing threat has been for hoteliers to make traditional hotel stays more attractive by improving loyalty programs and incentives. The Project With the growing undeniable trend in private home rentals, Stephanie Linnartz, Marriott's global chief commercial officer was tasked by the Board of Directors to address the threat. In the boardroom, Stephanie addressed her team of executives: "Home rentals and B&Bs have been around for decades, so the core idea itself isn't that new. The new part is technology platforms bringing it to consumers at scale, so it's democratized and affordable.". The company had polled its most loyal customers and found 30% had used a home rental in the prior year frequently for specific use cases like bachelorette parties and family reunions, for which entire homes are more suitable than hotel rooms. Page 2 of 3 "Nine times out of 10 this person was renting [a home] for a whole different purpose, and they were getting that from someone else," Linnartz said to the team. "Instead of trying to beat Airbnb with incentives, etc. which eat away our profits, perhaps we should be joining them in the market space for home rentals". The Plan Linnartz decided that the company was going to need a pilot project to test the potential of the private home rental market. "One of my favorite destinations is in the U.K. - let's set up a pilot project there and start with 15 properties in some of the most popular tourist cities. We will need to have a variety of property styles to offer. There is some specific data I want to uncover to determine if this new market strategy is something Marriott would like to roll out formally. We will need to determine the profitability and sales potential of the properties, and plot that against our existing regional sales. We will also need to determine if the new properties cannibalize from our existing properties, or if the revenue represents a previously untapped piece of the market." Linnartz continued: "I would like to have Manjot Singh be the project manager for this project. Manjot, I want you to select locations within 3 different cities in the U.K. Once you have your cities selected, engage our property management partners in the region, Bob Kelly from Turnkey and Jane Jones from Mainsail. They will be able to start making the connections with some homeowners in the selected cities. You can work out the remaining details with your team. Please start working on this project and send me your Scope Management Plan by the end of the month (Oct, 2021). We will name this pilot "Tribute Portfolio Homes"". Linnartz continued, "Once the infrastructure is set up, you will run the pilot for six months and provide a detailed report on the financials to see if this is worth expanding. You will also compare year over year sales within our existing hotel business to determine if this new segment is stealing away sales from our hotels." The budget for this effort was targeted at $490,000 USD. Singh was confident in taking on this groundbreaking project for the hotel company. "I shall get started straight away" he said to Linnartz. Singh's first order of business was to establish a list of desirable cities to start looking for potential projects. Once the cities were selected, Singh sent his list to both Bob Kelly, who specialized in the northern region of the U.K., and Jane Jones, who's specialty was the south, to begin the process of finding appropriate properties. In a conference call with Bob and Jane, Manjot explained: "We will be looking for unique properties in each of your regions. The properties should be very attractive and provide a special experience for our future guests. I would like to have at least three homes in each city that can sleep from 8-10 people, and a maximum of two condominiums per city that can sleep up to four people. Each property should be equipped with high end amenities such as air conditioning, wi-fi, laundry, cooking facilities, fitness (gym, pool, etc.). The properties should also have a unique look and personality. This will provide a fair variety for our guests. Once you have identified some suitable properties, we can send our property reviewer, Anthony Shark, over. Anthony will complete his guest review report and submit it. If the property passes the review, we will then need to have our safety and standard auditor, Patricia Potts, check the place out. Patricia will be checking for code violations, general construction concerns, etc. If Patricia finds that the property passes our safety standards, she will issue a Marriott standards certificate of compliance to Page 3 of 3 the property. After the partnership contract is signed between the property owner, property management company and Marriott, we can begin advertising the property on our website." "I would like to have all 15 properties identified and inspected no later than Dec 15, 2021" said Manjot. "Contracts can be issued and signed the week after that". Manjot knew that his team would also need to set up a website that could host the properties, take bookings and collect payments for the pilot project. The website would need to have a distinct look from the Marriott standard branding. To get this job done, Manjot called upon Dean from Marketing to pull together a branding concept that would show off the sophisticated and unique feel of Tribute Portfolio Homes. Dean would need to work with his team to develop all branding, and to create the website itself. The website would need to include: a clean, strong, and catchy home page, a clear view of all the properties including a minimum of 25 detailed photos for each site showing the exterior and interior of the property. The site will allow for online bookings and payment collection. For each booking, there should also be a short survey to discover how our guests like our new offerings and what could make the experience even better for them. The website will need to go live Feb 15, 2022. After that time, data collection can commence. Other items of consideration would include engaging the marketing department to begin designing a campaign to highlight the launch of this pilot project. Without some marketing customers will not be aware of the new program. The marketing campaign will need to include some standard mass media advertising but will mainly focus on online targeted campaigns like other competitors. A temporary operations team will also need to be put in place to maintain the website and to handle any customer service inquiries/issues/etc. With the team starting their activities, it was time for Manjot to draft his Scope Management Plan/Scope Baseline for submission to Stephanie Linnartz for approval. Once approved, this document will be the guide for what is included on the scope of the project. It will also provide a basis for evaluating potential changes as the project moves forward in time. **Note: Although the facts of this case are based on real events, this content is largely fictional and should not be used for any purpose other than for study at Fleming College. Sources: https://www.cnn.com/2020/01/17/business/marriott-stephanie-linnartz-risk-takers/index.html https://en.wikipedia.org/wiki/Marriott_International https://www.marriott.com/marriott/aboutmarriott.mi