Case Study of Warsaw Marriott

TSTD 6220 International Hotel Management

Fall 2017

Case Study 2

Mengmeng Wang

This case of Warsaw Marriott introduces its development history, the unique advantages it has and the highly competitive market it faces, focusing on analysis of the political and social factors in Poland. Experiencing regime changes, industrial unrest, civil revolution, the tourist’s population structure and demands in Poland fluctuate from time to time. As the only hotel in Poland operated by a western management team, Warsaw Marriott gained a large market share in hotel industry, and became one of Marriott’s most profitable foreign operations. Although Warsaw Marriott encountered with the threats from monopoly, Orbis, it still stands out with its high service standard and advanced western business philosophy. But now several new westen-managed luxury hotels were either in the planning stages or already under construction in downtown Warsaw, such as the Sobieski and the Bristol, may erode Marriott’s revenue. The case leaves a challenging and crucial decision for the general manger of Warsaw Marriott, Bruns, and his management team that is how to maintain its occupancy and room rates, while to retain its strength of excellent human resources, which contribute to the success of the property.

Marriott has presented a strong performance in the global hotel market. Not only Marriott develops its own hotels, but also signs long-term management contracts with investors outside. The Warsaw Marriott is such a joint venture, collaborating with Ilbau, a construction company and LOT, the Poland’s national airline, which owned the building and land. Three companies worked together to convert an abandoned skyscraper into a hotel property, under the government authorities’ eager support and attention. Warsaw Marriott received a large amount of base fee and incentive fee from hotel and the entire complex’s revenue, making this property profitable. But Warsaw Marriott still experienced tortuous development regarding to the Poland’s politics, economic and society. Under the strict control of the tourists’ movement and accommodation, firstly the international tourism in Poland developed slowly and was ill-fated. Dominant hotel company, Orbis, kept western visitors isolated from Poles, and its low levels of service and unmatched room rate decreased the interest and willingness of tourists. Also, the country’s foreign debt soared, the government’s martial law, the opposition movement tremendously impacted the total tourist arrivals. Since the Communist government lost credibility and was replaced by a Solidarity-led coalition, Poland’s market economy began to grow rapidly. More and more business traveller’s influxes brought about opportunities for hospitality industry. Marriott is competitive in this market since it has several effective advantages over other hotels. First of all, the Marriott brand name exists for a long time, widely recognized and highly regarded. That is to say, the advertisements are easier to function as a powerful strength. Secondly, the systematic management method such as international reservation system facilitates matters if tourists want to book a room from different channels, and the membership “Honored Guest Program” ensures the customer loyalty to the whole hotel group. The last but not the least, the employees in Warsaw Marriott the management team puts much effort to improve employees’ talent in hospitality service. The training program “Quality Certified Trainer” equips the employees with first-hand practices and allows them to rotate through different divisions. With these unique advantages, plus hi-technology support, as the hotel was outfitted with the most modern meeting and telecommunication facilities, Marriott defeats other hotels because no one could match in quality or popularity.