The global hotel industry has undergone significant transformation over the past two decades, with major players such as Marriott International expanding their influence through strategic acquisitions, technological innovations, and brand diversification. As one of the largest hotel chains in the world, Marriott has reshaped the competitive landscape, consolidating its market share and altering pricing dynamics, consumer preferences, and industry-wide business strategies.

By 2024, Marriott International operated over 8,600 properties across 139 countries, making it the largest hotel chain globally by room count. Its loyalty program, Bonvoy, had surpassed 190 million members, demonstrating its ability to retain customer engagement and brand loyalty. Through a mix of premium, mid-tier, and budget hotel brands, Marriott has been able to cater to diverse consumer segments, ensuring consistent revenue growth despite economic downturns and disruptions such as the COVID-19 pandemic.

This case study explores Marriott’s influence on the hotel industry, analyzing its market power, pricing strategies, competitive dynamics, and the economic effects of its expansion on independent hotels and consumers.

Marriott’s Market Power and Competitive Strategy

Marriott International has established a dominant position in the hospitality industry through aggressive expansion and strategic acquisitions. The most notable acquisition occurred in 2016, when Marriott acquired Starwood Hotels & Resorts for $13.6 billion, significantly increasing its portfolio. This acquisition allowed Marriott to absorb luxury brands like St. Regis and W Hotels, expanding its presence in high-end hospitality while reinforcing its brand portfolio across all market segments.

By 2024, Marriott controlled nearly 15% of the global branded hotel market, surpassing competitors such as Hilton, Hyatt, and Accor. This market consolidation has given Marriott strong pricing power, allowing the company to set industry standards for room rates, loyalty program structures, and franchise agreements.

The franchising model has been a key driver of Marriott’s expansion, with nearly 85% of its hotels operated by independent owners under Marriott’s brand umbrella. This model enables rapid global expansion while limiting direct capital expenditures, shifting financial risks to hotel owners and investors. Franchisees benefit from Marriott’s brand recognition, reservation system, and loyalty program, but they also face strict contractual obligations and high franchise fees, which can impact profit margins.

As a result, independent hotel operators have struggled to compete, particularly in urban markets where Marriott properties dominate prime locations. Smaller hotels often face higher customer acquisition costs due to their lack of global branding and weaker negotiating power with online travel agencies (OTAs) such as Expedia and Booking.com.

Pricing Strategies and Market Control

One of the key areas where Marriott exerts influence is pricing strategy and revenue management. The company uses dynamic pricing models, powered by AI-driven revenue management systems, to adjust room rates based on real-time demand, competitor pricing, and booking trends.

By 2024, Marriott’s average daily rate (ADR) had risen to $175 per night, marking a 12% increase from pre-pandemic levels in 2019. This price increase reflects rising demand in the travel sector, as well as Marriott’s ability to leverage brand strength to charge premium rates. Additionally, its Bonvoy loyalty program encourages direct bookings, reducing reliance on third-party platforms that charge commissions.

The elasticity of demand for Marriott properties varies across market segments. Luxury brands like Ritz-Carlton and JW Marriott exhibit relatively inelastic demand, meaning that high-income travelers are willing to pay premium prices regardless of fluctuations. On the other hand, mid-tier and budget hotels experience more elastic demand, as price-sensitive travelers are more likely to compare rates across competing brands.

To maximize revenue, Marriott employs tiered pricing strategies, offering discounts for early bookings and Bonvoy members while implementing higher rates for last-minute reservations and peak-season stays. This strategy ensures optimal occupancy rates while preserving profit margins.

The Effect of Marriott’s Growth on Independent Hotels and Local Markets

The rapid growth of Marriott and other hotel giants has reshaped the competitive landscape, making it increasingly difficult for independent hotels to survive. By 2024, independent hotels accounted for just 35% of the total hotel market, a significant decline from over 50% in the early 2000s.

One of the biggest challenges for independent hotels is customer acquisition costs. Marriott’s Bonvoy loyalty program captures repeat customers, making it harder for independent hotels to attract travelers who prefer earning rewards and redeeming points with a global brand. As a result, many independent hotels have resorted to heavy discounting or forming partnerships with OTAs, further eroding their profit margins.

Another concern is the impact on local economies. While Marriott’s expansion brings job opportunities and investment into local markets, it also leads to market saturation, making it difficult for smaller, locally-owned hotels to remain profitable. Additionally, Marriott’s pricing power allows it to outbid smaller competitors for prime real estate locations, ensuring that independent operators have fewer opportunities for growth.

Governments in some regions have responded by implementing regulations to protect local businesses, such as limiting the number of hotel licenses granted to major chains or offering tax incentives to independent hotels. However, Marriott’s global reach and financial strength make it difficult for regulatory efforts to counteract its market dominance.

Sustainability and Future Challenges

As the hotel industry evolves, Marriott has faced increasing pressure to adopt sustainable business practices. By 2024, the company had pledged to reduce carbon emissions by 50% by 2030, investing in energy-efficient properties, water conservation initiatives, and sustainable sourcing policies. However, critics argue that large hotel chains contribute significantly to environmental degradation, particularly through high energy consumption and waste production.

Another challenge for Marriott is the rise of alternative accommodations, such as Airbnb and boutique hotel startups, which offer unique travel experiences that attract younger, experience-driven consumers. While Marriott has introduced lifestyle-oriented brands such as Moxy and Autograph Collection to compete with boutique hotels, the company must continuously innovate to stay ahead of evolving consumer preferences.

Future Outlook: Will Marriott Continue Its Market Dominance?

Marriott’s ability to maintain its industry dominance will depend on its ability to adapt to economic fluctuations, changing consumer preferences, and regulatory challenges. While the company remains financially strong, its aggressive expansion may lead to diminishing returns in oversaturated markets.

If Marriott continues acquiring and franchising at its current pace, it may face antitrust scrutiny, particularly in markets where it holds excessive pricing power. Additionally, the ongoing shift toward eco-conscious travel could influence regulatory policies that restrict large-scale hotel developments in favor of sustainable tourism initiatives.

Despite these challenges, Marriott’s brand strength, technological advancements, and loyalty ecosystem make it well-positioned for continued success, provided that it balances expansion with evolving market demands.