Marriott continues to suffer from country controversy

BRAND HEALTH CHECK: Marriott touched the live wire of national pride when its China website listed Taiwan, Hong Kong and Tibet as countries. We assess the lasting damage, and lessons for other brands.

Marriott continues to suffer from country controversy

Marriott’s Chinese site is still down, more than two months after it first went down for a week starting on 11 January following a geography gaffe, where a Mandarin-language questionnaire listed Tibet, Taiwan and Hong Kong as separate countries.

The site went back online on 19 January briefly before going offline again on the same day, according to various Chinese media reports. A notice posted on the Chinese site says it is under maintenance and directs users to the company's international site and official WeChat account. Marriott’s official Chinese app is not available. An agent from Marriott’s Chinese customer careline confirmed that the mainland Chinese site has been down since some time in January but the hotel chain has yet to respond to Campaign’s request to shed light on this prolonged shutdown.

While the second shutdown has drawn less attention, news reports and social media chatter suggest that it was caused by yet another geography blunder. On the night of 19 January, social-media users shared screenshots showing Taiwanese cities Taichung, Tainan and Taitung being tagged as Japanese cities in a drop-down menu on a hotel booking platform that allegedly belonged to Marriott.

China and Japan have long been engaged in a feud over several matters including the latter’s occupation of Taiwan and a territorial dispute claimed by all three parties. Neither Marriott nor the Chinese authority has publicly addressed this allegation. The hotel chain’s Weibo account has gone quiet since its last post on 17 January.

Even though reasons for the prolonged shutdown are mere speculation, Jerry Clode, head of digital insight and director of SMART Research at Resonance China, points out that the Chinese government wants to show that it means business. “No Chinese official would want to be seen as being too easy on Marriott,” Clode says.

To the outside world, Marriott and Mercedes-Benz, which got into hot soup over an Instagram post quoting the Dalai Lama, might have been groveling in their profuse apologies, but many Chinese consumers weren't moved to forgiveness. Chinese consumers found fault with the first apology posted on Marriott’s Weibo account, which only addressed its rewards program members. A statement from Marriott’s president and CEO Arne Sorenson came too little too late after a then-employee manning one of the group’s official Twitter accounts “liked” a post from a Tibetan separatist group.

Clode believes Marriott would have fared better had it been more earnest in its first offerings of apologies. “Chinese consumers are huge on the idea that foreign powers would not say sorry,” he says. “It goes back to the idea that an apology is owed to China for the foreign intrusion during the Opium War.” In the court of public opinion, Marriott’s repeated mistakes make it a symbol of non-compliance, Clode adds.

At the risk of stating the obvious, the prolonged website shutdown does not bode well for Marriott, which owns about 260 hotels in China following its 2016 acquisition of Starwood Hotels & Resorts.

“The longer it lasts, the more memory structure is built” in consumers' minds, says Paul Galesloot, CEO of Cowan Asia, Ocenia, and Africa. China represents a small percentage of the company's global base. "But they are right now having a repeated negative impact on an increasingly large number of people,” he says, adding that returning visitors will be detered by the inactive site, and may not be interested in coming back again.

Growing nationalism

While the fiasco for Marriott erupted in a firestorm of similar proportions to the one Samsung faced during its exploding Note7 battery debacle, Galesloot said the similarities stop there. 

“The thing with Marriott is…it is about nationality, the core essence of humanity and identity, not a functional item like an exploding phone," he says. "Therefore it’s something that people are going to remember for a long time."

The Marriott crisis came at a time of surging national pride in China. President Xi Jinping made a strong call against attempts to "divide" China on the last day of the National People's Congress last week. From Brexit to ‘Make America Great Again’, people are focusing on their local identities, and brands that conflict with that could suffer a long-term impact. Zara and Delta Airlines were among the collateral brands which were exposed by Chinese consumers for similar geographical 'inaccuracy'.

“Marriott may want to do some connections with the Chinese festivals over the next 12 months, to demonstrate appreciation for Chinese culture," Galesloot says.

Evelyn Young, a seasoned Chinese digital marketer and founder of food recommendation mobile media platform Yueshiji, is less forgiving. "The fact that Hong Kong, Taiwan and Macau belong to China is indusputable," she says. "For an international brand such as Marriott to commit such an error, I can only say that it is deliberate on their part and not an error."

A frequent Marriott guest during her business trips, Young was adamant that she would not stay there again. "I believe that the fault is not with Marriott's China management, but what's done is done," she says. "It is a matter of principle. The higher management should have stepped up to apologise at a news conference in the first place."

Meanwhile, Twitter and Weibo users recently shared photos showing of a book called Thoughts of Chairman Xi being placed in Marriott’s hotels rooms. The posts ruffled some feathers in the pro-democracy camp, but Marriott has certainly been more cautious after the listing mistake. Taiwan is currently listed as a 'province' on the group's international site, while its hotels in Hong Kong, Tibet and Macau have their full addresses listed as being under China. Bloomberg also reported that Marriott swiftly removed decorative copies of a book that alleges government abuse against the Falun Gong from a local mainland hotel.

Mark Stocker, managing director of Taipei-based consultancy DDG, says the whole kerfuffle arose because of the listing of Hong Kong and Tibet as independent countries; Taiwan has long been listed as a separate country on many brand sites without incident.

While some Taiwanese consumers may not be very pleased with the way Marriott has handled the incident, Stocker says life goes on for them. “In fact, I would go as far to say that things like this can have a positive impact on the brand in a kind of perverse way because it raises brand awareness," he says. "It is quite perverse but it can actually happen, increasing the number of people visiting (the site) and purchasing the brand,” he says.

Forgive and forget

On the bright side, Galesloot says Marriott can take comfort from Samsung’s experience. The brand rode out the storm with its reputation as smartphone maker intact, judging from its sales numbers. He remains convinced that Marriott’s bookings from Chinese consumers won't take a hit despite the online vitriol. Alibaba’s joint-venture travel platform with Marriott has remained running throughout the fiasco, and travellers are still able to book on the international site after all. 

Furthermore, there are a few incentives for people to stay with Marriott. Its loyalty programme covers both Marriott Rewards and Starwood Preferred Guest accounts, and points can only be redeemed on bookings made on official sites. According to the company's 2017 fourth quarter earnings report, programme members stayed in more than half of its occupied rooms during that period. Marriott has also been known to be a digitally nimble hospitality brand, as it rolled out a Mandarin-speaking concierge service assistant on WeChat as early as 2012 to court Chinese consumers.

Nevertheless, Resonance’s Clode does not think that Marriott stands out from other international chains in terms of brand differentiation. “Many travellers are booking hotels on third-party sites," he says. "Price strategy appeals more to them.”

Ironically the lack of differentiation Close cites could help to cushion any negative impact in tourist-dense cities, where consumers would still opt for Marriott, he emphasises. That said, Marriott International has 30 brands under its portfolio, including Sheraton, Westin and Ritz-Carlton. Clode notes that the scandal appears to have only hit the Marriott brand, and consumers may not keep count of the group's many portfolio brands.

However, the incident marks an opportune time for the group to spend more effort promoting the individual brands, apart from the ongoing patriotic audit. “It may be a good way strategically to prepare for a PR crisis," Clode says. "One of the things to remember is that brands need to build a much closer relationship with consumers in China. If they were able to do that, it means these brands can move through the PR crises more easily."

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