HotelsMarriott International and Rakuten Group's partnership will allow customers to dip into each other’s loyalty programmes, in landmark deal that plays to two trends accelerated by Covid.

No. 1 players in the digital and hotel arenas pledge their loyalty

John Toomey, Marriott’s vice president, sales and marketing, Asia Pacific reveals the group's hyper-local strategy.
John Toomey, Marriott’s vice president, sales and marketing, Asia Pacific reveals the group's hyper-local strategy.

For Marriott, it’s about going hyper-local, much needed at a time when travel restrictions are still in place while it gives the Japanese e-commerce giant a global platform on which to grow its travel business, both domestically but mostly internationally. Rakuten Group has about 100 million members while Marriott Bonvoy has over 153 million members.

This new agreement is designed to create a seamless, integrated travel experience and allow eligible members to enjoy benefits from both Marriott Bonvoy and the Rakuten loyalty programme. The collaboration will allow Marriott Bonvoy to connect directly with Rakuten members and offer them access to experiences and 30 international hotel brands, and market directly to Rakuten’s customer base with content and promotions customised for the Japanese traveller.

Kazunori Takeda, group executive vice president, president of Commerce Company, Rakuten Group, said “this groundbreaking alliance will add incredible value for our members, enabling them to tap into the advantages of a global travel programme”.

Rakuten offers services in e-commerce, fintech, digital content and communications. With more than 100 million members in Japan, Rakuten’s multifaceted consumer offerings centre on its ecosystem comprised of more than 70 services, amplified and enriched through integration with its loyalty programme, Rakuten Points.

Said John Toomey, Marriott’s vice president, sales and marketing, Asia Pacific, “This collaboration is really part of a broader hyper-localised strategy to connect with consumers.

“The Rakuten digital platform with its 100 million members, which is almost the whole population of Japan… to us, there is no better local partner to engage with to grow our Marriott Bonvoy membership base.

“It’s a partnership that benefits two giants, the number one digital platform in Japan and the number one global hotel company. It enables Rakuten to grow its share of outbound business while we have 73 hotels and 20 more coming in Japan.”

He declined to disclose the financials involved in the deal but said “it was done in a fashion that pleased both parties”.

Scheduled to launch in phases from late-November 2021, the alliance will work in the following ways:

• Enrolment in Marriott Bonvoy for eligible Rakuten members will be a one-click process on the Rakuten platform using existing Rakuten member information.

• Get more: Rakuten members will be able to enjoy the benefits of Marriott Bonvoy such as access to member rates, the ability to earn and redeem points and other exclusive benefits that come with being a Marriott Bonvoy member.

• Once Rakuten members join Marriott Bonvoy, they will be able to access a variety of Marriott Bonvoy points redemption options to exclusive experiences such as private concerts and family-focused events through the Marriott Bonvoy Moments website.

Both Grab users and Marriott guests have benefitted from this “integrated” partnership, says John Toomey, Marriott’s vice president, sales and marketing, APAC.
Both Grab users and Marriott guests have benefitted from this “integrated” partnership, says John Toomey, Marriott’s vice president, sales and marketing, APAC.

Local language websites rolling out, Grab partnership paved way for “super local” strategy

While conversations between the two companies started before the pandemic happened, Toomey said, “What became clear to us – during the pandemic – was that we needed to be super local and find partners to engage with in the domestic market. With borders closing and inbound and outbound restrictions, we had to depend on domestic travel, whether in Japan, South Korea and India.”

This month, it is launching in-language websites in Thai, Bahasa, traditional Chinese and Vietnamese while optimising its Japanese, Korean and Chinese websites. “We need to speak to consumers in their language and show up where they are shopping,” said Toomey.

And that, to him, has been the silver lining to the pandemic. “It’s been the validation of our need to be local. There was always a realisation that we needed to go faster at being local but the question was, what are you doing about it?”

What Marriott did about it was its partnership with Grab in October 2020, its first extensive integration with a superapp in South-east Asia – it helped steer the hotel group through the months when dining in was restricted in most markets.

“We have about 200 to 250 restaurants in South-east Asia and when dining in became difficult, this was an advantage. We are trying to understand the gap and Grab, with its 200 million members, addressed that.”

He stressed that these partnerships were “not about the immediacy of the pandemic but are longterm – we are not going to halt the food delivery. We see that as complementing dining in.”

He said that talks with Grab started in 2016 but “this moment expedited the partnership”.

More customers coming direct, work being done on app

In another trend, he said, “We found more customers are coming to us direct, and this is an interesting evolving space in distribution. And of course, hotel companies like it when our customers come to us direct.”

He said Marriott has also just refreshed its app. “We want it to the most coveted app, the first place they look at. There’s more work to be done, I admit that, but we are working on it.”

Business in the last 20 months has been a “yo yo”, he said. “It’s really been up and down. At the end of 2020, we thought this is great, we will come out of this, but we hit some challenging periods in second quarter.

“Our business has taken a hit but we see encouraging signs in the last couple of months, and it’s following the vaccination rollout. It’s hitting 60% in Japan and our occupancies are increasing as well. Japanese are incredibly social and they are chomping at the bit to travel.”

He expects inbound levels to Japan to return to “some semblance of normal” by first or second quarter but it will not reach 2019 levels until 2023.

“In 2019, we had 20 million leaving Japan and 32 million entering Japan. The government has set a target of 60 million by 2030. Even through the pandemic, we opened 20 hotels in the last 12-18 months.”

Based in Hong Kong, he too is chomping at the bit to travel – after 20 months of no business travel, Toomey is embarking on his first business trip that will take him to Singapore and then Tokyo to officially sign the partnership with Rakuten.

Asked for his expectations of the partnership, he said, “It all starts with the consumer. If the consumer has an amazing experience, our revenues will increase and Rakuten and Marriott will both get their respective share of travellers, inbound and outbound.”

As for similar partnerships, he said, “Our eyes are always open. The Rakuten agreement has crystallised what we want out of the partnership and we will find other suitable partners.”

As for where those might be, its priority markets in terms of outbound are Australia, South Korea and India, in addition to Japan and China, while for Indonesia, it’s domestic, with 150 million domestic trips a year. “It can vary based on how we mesh that up,” said Toomey.

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