Stop me if you've heard this one before: A major international company is leveraging its tech platform and the data it has amassed on consumers to drive revenue for advertisers.
Sound like 90% of business in 2022? Well the difference this time is that major international company happens to be a hotel brand platform — the largest, in fact.
Earlier this week, Marriott International announced a partnership with Yahoo to launch the Marriott Media Network, billed as "an omnichannel cross-platform advertising solution for brand advertisers, enabling curated content experiences and offerings to guests throughout their travel journey."
As the Wall Street Journal reports it, this will boil down to Marriott using the data it has amassed on guests, largely through its Bonvoy loyalty program, for targeted ads via the Marriott app and in-room televisions.
While leveraging data for target ads has been the bread and butter for tech giants like Google and Facebook for years, more companies outside the tech space — Walmart, Kroger and CVS, to name a few — are making this move. Streaming TV giants Disney and Netflix also are increasingly flirting with or openly committing to ads on their platforms.
The reaction has been predictably pessimistic, with a recent report by Gizmodo — headlined "Why Every Company Is an Ad Company Now" — pointing out many consumer brands are moving quickly to fill a space vacated by companies like Facebook due to new data regulations, including the European Union's General Data Protection Regulation and the California Consumer Privacy Act.
"Around the time that legislation went into effect, retailers with niche audiences — like, say, Marriott hotels, which primarily serves well-to-do travelers — realized that they had data that platforms like Facebook no longer had access to," the news outlet reports. "They knew when people were traveling and when people were buying tickets not because they were purchasing that data from a data broker but because their customers were freely divulging with every click on their sites."
I totally understand the reaction to things like this — that it's simply large companies filling their already deep coffers by using information guests must prefer to remain between them and the company.
But ...
I also know there is an argument to be made that this move is in the traveling public's favor.
To put it simply in an ever more complicated environment: The costs of travel are skyrocketing.
Airfares have shot up 25% over the past year, drastically outpacing the Consumer Price Index, according to the U.S. Bureau of Labor Statistics. Obviously, data from CoStar's hospitality analytics firm STR consistently shows hotel rates increasing, fueled by strong leisure demand and outpacing gains in occupancy by a significant margin.
All of that combines into a much steeper bill for the average traveler at precisely the time they want to get back on the road or in the air. At the same time, for hotels at least, the cost increases are obviously justified, with operational costs, including wages and utilities, increasing significantly in a high-inflation market.
While all of that has absolutely nothing to do with leveraging guest data to build out an ad-selling network, what it does mean is hotel companies are hungry for any and all revenue to preserve profitability, and they might not have much more runway if they're looking to recoup those costs out of travelers' wallets. So finding alternative methods to monetize the traveler — like selling targeted ads — is a net positive for everyone involved ... assuming those same companies aren't looking to double dip to an extreme by simultaneously jacking up rates and driving ad revenue.
If — and this is a colossally big if — this takes off and Marriott can find ways to not only drive revenue but also share a piece of the pie with franchisees, it'd be a massive boon to the traveling public if travel could be made more affordable and accessible. That hope might be a big pie in the sky, though.
Either way, Marriott and whatever hotel companies choose to follow its lead on this will have to tread carefully. There is a negative connotation associated with all of this, and if it results in a significantly worse guest experience, there will be clear blow back — especially as guests are already paying more than ever before.
Let me know what you think on Twitter, LinkedIn or via email.
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