Alibaba Group and Marriott International Monday unveiled a new joint venture to combine the e-commerce giant’s in-depth knowledge of China’s consumers with the latest in digital commerce, streamlining and upgrading the travel experience for hundreds of millions of Chinese tourists.
The venture will deliver personalized trip-planning services, VIP travel experiences and exclusive benefits to each company’s membership clubs, Alibaba and Marriott said at a joint press conference in Shanghai. Marriott, one of the world’s leading global hospitality companies, will also accept Alipay, the online-payments platform owned by Alibaba affiliate company Ant Financial.
The JVwill manage Marriott’s storefront on Fliggy, the Chinese group’s travel service platform, as well as the hotel chain’s Chinese-language digital channels including Marriott.com and Starwoodhotels.com and the Mobile Marriott and SPG apps. In addition, the JV will provide content, programs and promotions customized for Chinese travelers, enhancing offerings on those sites.
“Together, we are elevating and redefining the travel experience for Chinese consumers to be more seamless and personalized as they embark on adventures to discover the world,” said Daniel Zhang, CEO of Alibaba Group, in a statement.
Bethesda, Maryland-based Marriott operates over 6,200 properties in 125 countries, including brands such as Ritz-Carlton, Sheraton and W Hotels. Through the partnership, Marriott will be able to leverage insights gleaned from Alibaba’s 500 million mobile monthly active users to better market to and engage with China’s ever-growing consumer class.
Marriott International President and CEO Arne Sorenson said the joint venture would allow the company to access Alibaba’s retail expertise, Alipay’s global payments platform and Fliggy’s online travel services to tap the continuing surge in Chinese tourism both in China and internationally.
“With the growing number of Chinese consumers exploring new destinations, this venture will introduce our hotels worldwide to this new and growing traveling class,” Sorenson said in the statement.
As incomes in China rise, the country’s middle class is looking for both higher-quality—and, often, foreign goods—as well as more-sophisticated travel experiences. The trend provides a growth opportunity to players in the industry, as these consumers are expected to take700 million trips over the next five years. According to Fliggy, half of China’s outbound travelers are young, between the ages of 23 and 34, while the general trend among all Chinese tourists is to seek out new experiences, rather than going abroad purely to shop. One survey of Chinese travelers heading overseas in May also found that about a third of respondents planned to spend more on their accommodations.
At the heart of the deal is the companies’ push to fully integrate the travel experience for Chinese tourists as e-commerce and offline shopping continue to merge. To that end, consumers will now be able to plan, book, pay and manage a trip, as well as shop, eat and sightsee at their destinations, all by using the digital platforms of Alibaba and Marriott.
They will also look to expand the range of those experiences for Marriott and Alibaba loyalty club members. Marriott will offer access to private concerts, family-focused experiences and courtside seats at sporting and other events through its Starwood Preferred Guest Moments and Marriott Rewards Moments programs, while Alibaba members will get access to personalized hospitality programs SPG Ambassador, Marriott’s global concierge service.
Alibaba and Marriott said they eventually plan to create a next-generation loyalty program by linking the benefits of Marriott’s loyalty platform, Marriott Rewards, the Ritz-Carlton Rewards and SPG, with Alibaba’s member loyalty program. The initiative would include benefits such as status-tier matching and the ability to exchange and redeem points between the two programs for travel planning and retail purchasing.
As part of the announcement, Alibaba launched its new “88” loyalty program for users of its e-commerce platforms, which will offer more members-only brand services, discounts and benefits. On Tuesday, August 8, members will be able to enroll in one of Marriott’s loyalty programs and book exclusive member rates through one of Marriott’s digital channels, beginning immediately.