IMO Q2 Big 4 Platform Integration Update
THE BIG 4 | PLATFORM INTEGRATION
Owners and Franchisees,
In April, we announced that Marriott Rewards, The Ritz-Carlton Rewards, and SPG will become one combined loyalty program with one set of benefits starting in August 2018. We will communicate the actual date of the August launch. When the combined loyalty program goes into effect, we will also launch EMPOWER: Guest Experiences, Mobile, and Channels.
Starting in September, we will begin transitioning SPG properties by wave to the Marriott Reservations Platform, which includes Reservations, Revenue Management, Property Management, and Sales & Catering systems.
SYNERGIES
Marriott will implement a Program Services Fund (“PSF”) for the majority of required, recurring, system-wide (Managed by Marriott and franchised), above-property Programs and Services (P&S) on Jan. 1, 2019. The PSF is a bundled-charge approach that allows Marriott to manage Programs and Services in a manner that is simple, flexible, and predictable for owners.
We have consistently maintained that the integration will enable scale cost synergies, and these will be delivered largely through the PSF.
The PSF will include the costs of Central Reservations and most required system-wide P&S, such as Mobile Guest Services, One Yield (Marriott’s Revenue Management System), EMPOWER: Guest Experiences, and guestVoice, but will exclude costs from the Loyalty Program and consumer-driven commissions.
Rather than a specific charge per-program or service, the PSF covers required P&S through a combination of three variables: a fixed amount per property, plus a fixed amount per-key, and a variable percent of room revenue. This approach mirrors the cost-behavior of many of our programs.
Additional details will be included in the 2019 Budget Instructions and via a recorded webinar, which will be made available early next month. Should you have any questions about the PSF in the meantime, feel free to reach out to your account executive.
Other key initiatives and deployments which are continuing to drive value for owners and franchisees include:
Transaction-Based Media Program (TBMP): Through the Transaction-Based Media Program, Marriott properties can grow their share of direct bookings by appearing in ads on metasearch websites (i.e., TripAdvisor and Google). These completed stays are generated at a low cost-of-sale for the hotel: 9% on eligible stays. The Transaction-Based Media Program (TBMP), which is already in place for Marriott Rewards hotels, will begin for SPG hotels in January 2019. Over time, SPG properties should expect to see incremental direct-channel revenue shift from higher-cost channels such as OTAs, offsetting the cost of the program. Further details on TBMP will be communicated in the 2019 budget instructions.
MI LEADS: Globally, through April 2018, over 16,000 users from more than 3,800 hotels have enrolled in MI Leads. Over 5,000 leads have been sent, creating more than 10,000 opportunities for hotels across the portfolio of brands, with over $7.3 million in business already booked. In the Americas, over 9,000 users from more than 2,600 hotels have already enrolled, over 1,800 leads have been sent, and over $3.4 million in business has already been booked.
There is additional opportunity to build upon the success of the MI LEADS program in the U.S. & Canada, and franchised hotels that are not yet participating are encouraged to do so. For more details on the program including how to enroll, visit the MI LEADS MGS page (keyword: MI LEADS).
Finance: Managed by Marriott (MxM) SPG properties in the U.S. have completed the final component of their finance integration efforts, transitioning to the Billing & Accounts Receivable processes enabled by the PeopleSoft technology platform and supported by MBS.
Procurement: Throughout 2017, Marriott Procurement identified contract savings which in total delivered totaled $46 million in annual negotiated savings for participating hotels. Estimates for initiatives in 2018 forecast additional savings of approximately $71 million per year in incremental global savings.
We thank you for your continued support and engagement, and we look forward to the major integration milestones and associated benefits that will be achieved throughout 2018.
Best regards,
Liam Brown
President, Franchising, Owner Services and MxM Select Brands, North America