Distribution Channels in the Travel and Tourism Industry

A Case Study of Marriott International

Introduction

Marriott International, a global hospitality leader with over 8,500 properties in 138 countries, depends on a strategically structured distribution system to maintain efficient operations and deliver quality services (Marriott International, 2023). Distribution channels are integral to the travel and tourism industry to ensure smooth logistics, effective booking, and consistency in service (Kotler et al., 2021). Marriott employs direct and indirect channels—including its website, mobile app, OTAs, and corporate partners—to maximize guest reach and satisfaction. This paper explores Marriott’s distribution strategy, the transformation and movement of goods, challenges within its system, and recommendations for optimizing efficiency and sustainability.

Marriott International’s Distribution Channel

Marriott’s multi-channel distribution strategy enables global coordination across procurement, transformation, and service delivery. The company sources raw goods such as linens, furnishings, and technology from international suppliers and distributes them through regional hubs (Marriott International, 2022). These goods are transformed into consumable services across Marriott’s various hotel brands through large-scale logistics, warehousing, and property-level integration (Christopher, 2016). Final delivery to customers occurs through direct channels like Marriott.com and its app and OTAs such as Expedia and Booking.com (Buhalis & Law, 2020).

Logistics of the Distribution Channel

Marriott’s global logistics operations are supported by supply hubs that streamline inventory management and reduce delays and transportation costs. A consistent brand experience is achieved through the standardized delivery of operational supplies and room amenities (Christopher, 2016). Technology enhances this system through real-time inventory tracking and dynamic pricing algorithms that respond to shifting market demand (Ivanov & Webster, 2019). Additionally, Marriott’s app offers mobile check-in, digital keys, and room selection, enhancing convenience and brand loyalty.

Booking and Sales Channels

            Marriott uses an omnichannel sales approach to broaden market accessibility. Direct bookings—encouraged through the Bonvoy loyalty program—offer perks like exclusive rates and personalized services, strengthening customer relationships. At the same time, third-party OTAs help attract new customers globally, especially those unfamiliar with the Marriott brand (Buhalis & Law, 2020). Corporate partnerships and travel management companies support group and business travel, which remains a key revenue source.

Challenges in the Distribution Channel

Supply Chain Disruptions

            Global sourcing makes Marriott vulnerable to geopolitical instability, pandemics, and natural disasters that can disrupt material flows (Ivanov & Webster, 2019). While regional hubs mitigate delays, unforeseen global events can hinder operations and impact guest experiences.

High Commission Fees from OTAs

            Though OTAs drive international traffic, they charge up to 25% commission rates, eroding Marriott’s profit margins (Buhalis & Law, 2020). Additionally, reliance on intermediaries weakens direct customer relationships and reduces loyalty program participation.

Operational and Sustainability Costs

            Managing logistics for thousands of hotels demands significant transportation, warehousing, and tech infrastructure investment. While aligned with CSR goals, Marriott’s focus on eco-friendly practices can increase operational costs due to more expensive sourcing and logistics requirements (Marriott International, 2022).

Service Consistency Across Markets

            Marriott must meet customer expectations for uniformity in quality, amenities, and service regardless of region. Inconsistencies may arise due to local supplier limitations or staff training disparities (Kotler et al., 2021). While the brand invests in training and quality controls, achieving uniform excellence globally remains complex.

Recommendations for Improvement

Supplier Diversification

            Further diversification of Marriott’s supplier base across geographic regions can reduce the risks associated with overreliance on limited sources. Establishing relationships with local and regional vendors also shortens supply chains and improves flexibility (Christopher, 2016).

Strengthen Direct Booking Incentives

            Expanding Bonvoy’s appeal with exclusive upgrades, flexible cancellations, and loyalty bonuses can increase direct bookings. Tailored marketing and AI-powered personalization can further drive customer retention (Kotler et al., 2021).

Investment in AI and Predictive Analytics

            AI-enhanced forecasting helps Marriott align procurement with demand, minimizing waste and avoiding shortages (Ivanov & Webster, 2019). Advanced data analytics can also improve pricing strategies and optimize inventory distribution for efficiency and profitability.

Deepen Sustainability Integration

            Sustainability can be scaled more effectively through partnerships with eco-certified suppliers, carbon-neutral shipping programs, and biodegradable packaging. These efforts align with CSR goals and appeal to environmentally conscious travelers (Marriott International, 2022).

Conclusion

Marriott International’s distribution strategy integrates direct and indirect channels, global supply management, and advanced technology to maintain its position in the competitive hospitality market. Despite the strong systems in place, the company must continuously address challenges including OTA overreliance, operational costs, and service consistency (Christopher, 2016; Kotler et al., 2021). Enhancing direct booking, investing in AI, and expanding sustainable practices will allow Marriott to improve operational resilience and guest satisfaction. Marriott’s ability to refine its distribution strategy will be central to its ongoing success as the industry evolves.

References

Buhalis, D., & Law, R. (2020). Progress in Tourism Management: Distribution Channels in the Digital Age. Tourism Management, 81, 104158.

Christopher, M. (2016). Logistics and Supply Chain Management (5th ed.). Pearson.

Ivanov, S., & Webster, C. (2019). Adoption of AI and Automation in Tourism and Hospitality. International Journal of Tourism Research, 21(5), 606-617.

Kotler, P., Bowen, J. T., & Makens, J. C. (2021). Marketing for Hospitality and Tourism (8th ed.). Pearson.

Marriott International. (2022). Sustainability and supplier responsibility report.

Marriott International. (2023). About Marriott.