Alibaba Consolidates Position in Travel Market with Marriot Partnership

A new joint venture between Marriot International and Alibaba Group Holding aims to connect Marriot’s digital offerings with Alibaba’s to create a more seamless experience for Chinese travelers. The new venture will manage Marriott’s Chinese language digital channels, like the Chinese versions of Marriott.com and Starwoodhotels.com. The venture will also manage Marriott digital storefronts on Fliggy, Alibaba’s own travel platform formerly known as Alitrip. For Marriot, this provides an opportunity to market its hospitality products directly to Alibaba’s large Chinese user base by linking loyalty programs between the two firms and creating promotions to directly targeting Chinese travelers. Marriot's hotel portfolio is relatively diverse with a variety of mid-range business and leisure hotels as well as high-end offerings such as the Ritz-Carlton brand. The new rewards program includes many of the Ritz-Carlton's Asia locations in China, Japan, Hong Kong, and Singapore. The Marriot JW luxury brand is also included in the program at its locations in China, Hong Kong, Thailand, and South Korea. Alibaba stands to benefit by helping to consolidate its position in mobile payments for Chinese outbound tourists. With the venture, Alipay can now be used to book hotels and make purchases there within certain overseas markets, all in East Asia. While certainly an effort to generate more revenue from Chinese travelers, this new venture is also part of a larger strategy on the part of Alibaba to become an indispensable part of the lives of Chinese consumers. In only a few short years, mobile payments, whether through Alipay or Tencent’s WeChat Pay, have grown exponentially in popularity in China. Both firms are now seeking to extend their reach to global travel. It is unclear to what extent global travel revenue contributes to Alipay or WeChat Pay’s total revenue. However, the international thrust has clear implications for the Chinese mobile payments market. By promoting the usefulness of their platforms abroad, these firms hope to consolidate their hold over the domestic market by ensuring their user base never strays from their respective platforms. More and more firms and overseas markets are making efforts to integrate the use of domestic Chinese mobile payment systems in Southeast Asia, Europe, and the United States. Moreover, the move targets both more budget oriented middle-class travelers and wealthy, luxury travelers.

Alibaba Consolidates Position in Travel Market with Marriot Partnership

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Published August 08, 2017

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Alibaba Consolidates Position in Travel Market with Marriot Partnership