Marriott Homes & Villas with Jennifer Hsieh

Hey, welcome to Keynotes. I'm your host, Steve Schwab. Here today with Jennifer Shea, Jennifer is the managing vice president and global category leader of premium and adores brands. She's responsible for Marriott's brands and experiences including the MGM collection, Marriott Bonvoy, Homes and Villas by Marriott Bonvoy. And she's also responsible for premium brands including Marriott Homes, Sheraton Hotels, Delta Hotels, Western Renaissance Hotels, the autograph collection, tribute collection, and probably 10,000 other things that I'm not mentioning here. I was recently on a panel with Jennifer at Focusrite and I was incredibly impressed with her ability to articulate all the interesting things that are going on with Homes and Villas today. Astrid, come on to the podcast and she was gracious enough to do that. I'm really honored that she is here with us today. Jennifer, welcome to the show. Thanks, Steve. You're so excited to be here. So glad to have you. Jennifer, you've have quite the background. You've come up through the brand. You were the person who actually introduced the idea of Homes sharing into Marriott, right? That was. It was a fun story when I started at Marriott 16 years ago. My first job and the job that I had for the first nine years at Marriott was really leading the enterprise innovation function. And that meant I was helping to create new things that would delight customers for which they would pay a premium for. And so that spanned everything from helping to reinvent how we think about in-room directories to helping to establish new categories for the company. And so when we started to enter all inclusive, the questions were, well, how do we enter it? Do we create new brands? Do we use our existing brands to how do you enter adjacent spaces? And so in innovation at Marriott, we would do everything from what I call the little eye incremental innovation to make our current hotel experiences better. All the way to the big eye, which is how do you move into spaces that are not traditional hotel spaces? And so the origin story a bit on Homes and Villas is gosh, it was about seven years ago at that time the president and the CEO said to us as the innovation team, I've got like 15 white papers sitting on my desk right now talking about how home rentals and short term rentals are increasing in relevance for consumers. But we haven't actually done anything about it. We studied it a lot, but we haven't had the opportunity to actually make changes, create programs to address this emerging consumer trend. And so we began this innovation work that said, well, if Marriott were to participate in the space, how would we do that? And we had other examples that where hotel companies had tried to kind of dabble in the space, whether it was through an investment approach, which was primarily what we saw at that time. And so we developed an initial concept, which was a new business model in the industry at that time. And that business model was not the typical, hey, we're just going to invest in a management company and we're going to see how it works. Nor did we actually think that that was the right strategic move for us. We knew that operating and managing hotels is very different than operating and managing homes. Homes are highly distributed in a market. The the challenge of cleaning homes is wildly different than the challenge of cleaning hotel rooms in our hotel space. Sometimes you'd have a housekeeper who has been doing that floor, those set of rooms for many, many years, right? And at their at their disposal were sheets and equipment and supply, whereas the challenge when you were tackling an urban or distributed location was quite different. So we knew that that wasn't the right model. And so we developed an initial model that we launched as a pilot. We took our current tribute portfolio brand, which is one of our what we call soft brands is a collection brand of independent hotels. And we tacked on the name homes and we called it tribute portfolio homes. We launched it in 2019 and we did an initial couple of markets, one in London. And then it eventually explained it to five European markets. And what we did was we created with a management company. So we took one management company and we partnered with them and we launched tribute portfolio homes where we would market a curated view of their homes and really put it in front of our consumers to see if it would be relevant, if they would book what the state experience was like. And all of those things in that pilot informed the eventual build of this business today. And so when we were doing this work, we've always got a ground, any innovation work in this consumer insight. And one of the insights that we were able to share at the company was that 27% of our Marriott Bomboy customers at that time, this was in 2018. We're leaving the Marriott ecosystem to go bulk homes. And we knew from a strategic perspective, we wanted Marriott to serve almost every need that a consumer had when they travel. And so when we saw the insight that 27% of our guests were leaving our ecosystem to go bulk homes on other platforms, we really saw an opportunity to come into the space with a different business model. So that meant the business model that we relied on was really kind of borrowed from our hotel business, which is out of the 9,000 plus hotels that we have, we don't own, but maybe a handful of hotels. Instead, we partner with hotel owners and operators who know how to own and operate those hotels. And we give to them kind of a set of brands and standards and all these resources to elevate how they deliver to the guest, as well as a great kind of channel. And so we adopted this kind of unique business model, which meant we were working only with professional property managers. We needed the ability to say we understand that they're professionals who are operating the day to day around how they transact with consumers, how they clean the homes, how they provide service. And we needed the rigor and discipline of something that was professionally managed that we could work with, that team, that business model was a business model that I think has been borrowed quite a bit since our launch. I never realized that the Mary at Holmes and Villas was really something of an extension of the business model that was already in place, but being applied to a new category within hospitality. And that's where I think the value of coming into this space is really important for us as a hospitality company, right? There's so many learnings and best practices that we take from our hotel business and that we apply into the home rental space. However, the team that I had building this business that I still have building this business is also so good at understanding the unique nuances of the home rental space and adapting it for how we operate. And so our business is like, we are a startup within the world's biggest hospitality company. And we operate like a startup. We have all of our core disciplines. I have a team of people who focus just on Holmes and Villas for the brand and the marketing. I have somebody who focuses and leads all of our customer care, someone who leads all the brand standard development. We have our own tech team that understands that how you show a hotel on a digital site is very different than how you show a home. And the homes are much more complicated in terms of details and nuances. Sometimes we get questions around, you know, for this Holmes pool, is there zero depth entry? How steep are the stairs? These are the types of details that you typically don't necessarily need in a hotel. And so we have a fantastic team within the broader Marriott ecosystem that focus on making sure that the Holmes and Villas product is distinguished and delivering on the promise that we make to our customers, which is luxury and premium whole homes professionally managed. They're clean. The service is wonderful. They're reliable. And they really become the place that you bring family and friends together to create great memories. Jennifer, when it comes to the homeowners who are looking to bring their property onto Marriott Holmes and Villas through their, you know, professional property manager, what's the most common reason why a home doesn't qualify to be on Marriott Holmes and Villas? A lot of it will come into the physical space. So when we look at the criteria to help a home meet our standards and Steve, so you're listeners know the way we work is we identify the best property managers in a particular area. And then we work with that property manager to make sure that they have all the systems and structure where they're protecting the homeowners and the customer data, where they are making sure that they're operating to a certain level of standards. And then we review every single home that is in their portfolio to see if it meets the criteria of what we would characterize as a luxury or a premium property. And by the way, that is a very difficult description because you have luxury properties in Gatlinburg. And then you have luxury properties in Aspen. And those two different luxury properties. And then you have luxury properties in Goa, India. And then you have luxury properties in Frankfurt, Germany. And those in a home experience are wildly different. And so when we look at it, we look at two criteria. One is what does a home look like from an interior perspective? And then what does the neighborhood and context look like? And so from in the home, I won't give away all of our secret sauce because we have a proprietary list of criteria that our teams look at. But we will look at things like definitely around what I would call signals. And so there's a very specific things like expose box springs. And so typically when you have exposed box springs on a bed, that means the rest of the house is not being cared for and decorated and up to a particular standard. When you have window unit AC or when you have appliances in your kitchen that don't match a black refrigerator, a silver dishwasher, a white microwave, all of those things become kind of signals on whether or not the rest of the home is decorated furnished to the quality and the level that we expect. I have a sunset cruise boat in Portipiniosco, Mexico. And I always talk to the team about making sure that everything is perfect when the guests of the boat, the other passengers of the boat step on to the boat because they would always have to wonder if we're not taking care of the parts they can see. What does the maintenance look like below deck? And that builds confidence. And I think that translates to something you were just saying here. That's exactly the same. It's exactly the same. And in our hotel experience, we do a ton of research across all of our hotels. What are the moments of truth? What are the moments that matter the most for our guests? The arrival experience is a huge one. But the same applies to whether it's your boat or if it's a home, there's certain signals of quality that a consumer sees. And those often serve as good indicators for us. But you know, the basics are, let's just make sure things are very well clean. There's no another signal is cable management. And so cables for computers and TVs. When they are strewn all over the back wall, it definitely sends a message. And that message is like, we're not really caring for the details of this particular home. Another one is a lot of times homeowners forget that their balconies are in terraces or just as important. And so that outdoor space, making sure that's well cared for. And so clearly on the interior of the home, we're looking for things that are clean, tidy, and good condition. They match as appropriate. And then that they're not too stark. It doesn't look like someone's simply rented an apartment or a home and then just put in the bare minimum. And so, you know, obviously design is in the, I have behold the beholder. Sometimes like in Palm Springs, you'll get great kitschy design that evokes the the 60s and 70s. And then that may look outdated in another home. Yeah. What you put in Scottsdale or Zona, if it looked like Shag Carpets and avocado green refrigerators does not translate there. But you put that into the right context of Palm Springs. It's cool, right? Yeah. It's cool. And it's got personality. And if it's well maintained. And then when we look on the exterior of the house, we look at certainly at safety and security are big things. One of the things that we've had a lot of debate upon is the role of graffiti in our European urban markets. And you definitely have, you know, some Europeans who are like graffiti is part of what you get when you're in Berlin, right? And that is just part of the neighborhood, the vibe, the look. And then others who are like, now graffiti is a signal of a challenging kind of location. And so we have teams that are based in different parts of the world that can give us the right cultural nuance for that. And so if you've got graffiti happening in Orlando, I would say that that's probably a bad thing. It's not a good indicator. Right? But if you have graffiti outside, you know, three bedroom penthouse that's across the street in Berlin, that might be okay. Fascinating. You know, I was recently on a panel at Darm down in in Florida in Destin with a really great crew that was discussing luxury. The discussion circle around standards standardization and what I call consistency. And I made the argument that within vacation rules, standardization of the property isn't what people are looking for. They're looking for consistency and trust and reliability through standards. And I'd really love to know what your thoughts are on that. And also does may not have a definition of what luxury is. Oh my gosh, I 100% agree with you. Standardization, I think flies in the face of why people go to home rentals. People choose homes because they want oftentimes unique experiences. They don't want cookie cutter products from the interior. And so this notion of like, I've got our hotels. If you take a look at courtyards, we have prototypes. We have physical designs where we say, if you're a courtyard in the United States, you get to pick A or B floor plan, right? And then everyone go build those exact same things. That is not what the consumer wants from home rentals. Consumers who are doing home rentals have very clear need states. And those need states are either I need multiple bedrooms where we can gather. And I often want a unique experience that's better located where for us where hotels can't dominate, right? And so these are the beach side in the lakeside on the mountain. These are the types of homes that are highly distributed and are seasonal. And those consumers are looking for an experience that is unique to that destination. They are expecting from us. And we know this. They expect from a Marriott endorsed experience that we will meet certain standards. Standards of clenliness, standards of safety when it comes to things like, um, smoke alarms, right? Uh, standard approaches for how consistently we deliver information around how you access the home and unlock the key standards for what happens when you when something goes wrong and you need support. That is what consumers want. They want to take out the unpredictability and the downsides. And for us at Homs and Villas, that's our promise to the guest, which is like we're looking for the premium and the luxury homes that are going to deliver great quality and consistency because oftentimes the payoff for the customer is about a unique experience that brings family and friends together in a way, you know, that is, you know, very unique to a home experience. We're either cooking together. We're spending time by the fireplace together. We're out at the pool and the backyard together that they typically don't get in their day-to-day lives. Those things that we standardize operationally isn't for the guests to be, they don't care whether standardized, they care about consistency. And operationally, there are some things we have to, we standardize. Like, it's much easier for us to standardize laundry sheets and, you know, and amenities, right? Now, the guest doesn't care about that. What they care about it, that's consistency around, you know, like you say, cleaning a safety, those sort of things. You know, they're sleeping arrangements. How we say people want an adventure in their travels, they don't want an adventure in where they sleep, right? You want to make sure that you have clean sheets and some, you know, a bed that's not lumpy, that's, you know, comfortable and well cared for. Standards are the unsung hero. People don't choose a home because of standards, but when standards go wrong, that is where it's very apparent, right? And so, when things go wrong, which is like, oh, my sheets were dirty, there was no way to kind of get to it, or I couldn't access the Wi-Fi. And so that's why having professionally managed properties is so important to us, because we rely on our partners to be able to create standards, protocols that say, this is how you treat Wi-Fi, this is the level of Wi-Fi you expect, and this is how you message the Wi-Fi for the customers, which by the way, Wi-Fi is more important than water to consumers these days, right? When you think about your, your base of guests who come to the Marriott often, you have a lot of brand there to protect. Do a lot of the people who book through Marriott Homes and Villas use their Marriott Bon Voy points? Is that a big part of your business? And does that change the way the guests see, you know, the product they're using and maybe their activities or the way that they interact with the properties in general? We have over 45% of our transactions on our bookings have some form of point usage to it. All the way up to, we've had guests book stays for 11 million points. Wow. And so, I mean, the time it takes you to accrue 11 million points is long, and that's how committed they are to the Marriott experience. But I often talk about the incrementality of our guests and our bookings because there's no other company that uses, that has the currency of Marriott Bon Voy points. And the way I like to think about this is oftentimes you will have the business traveler, he or she, is traveling every week as a sales leader and seeing at our court yards and our residents and their earning points. And what they want to spend those points are our ungrade experiences for their friends and family. And that is where Homs and Villas plays a really critical role. And so when we see 45% of our transaction having some form of point usage, whether it's for the entire stay or part of the stay, it is a great reinforcement for us that the role of Homs and Villas for us at Marriott is to better serve the needs of our existing customers. There's what we call the virtuous cycle a lot within our business, the virtuous cycle of how do we better serve our existing Bon Voy base of customers, which is over 200 well over 200 million these days. But also how do we help our partners who are working with homeowners to drive incremental business from fantastic guests and continue to give feedback that helps them keep their Homs and the best state that it can be? That makes me think a lot about the pride of ownership within a property. And I don't know if you're aware of this or if Marriott's aware of this. But when a homeowner inside of, you know, Kusago through one of our franchise partners ends up on Marriott, you know, Homs and Villas, there's a real sense of pride and a little bit of an eliteness going on there. And they ask us to put that on different parts of the website to promote that this is available through Marriott's home and Villas because it's a trust signal. So for those homeowners who are on the program through Kusago, I think they actually convert better not only on Marriott Homs and Villas because when you see that it's listed there or that we mentioned that, hey, this is also available through this channel. There's an immediate credibility that's been placed upon that property itself. And we love that. We hear that as well. And that is what brings our team a lot of immense pride. We want to hear more and more homeowners be excited about having their home available. We hear it all the time. I hear it like, oh, my cousin has a home by the beach and they're on a merit, Homs and Villas. And so we love that and we want to encourage it. Does the algorithm on Marriott's home and Villas favor those who get better reviews over time? It is one of our inputs. So it's a combination of proximity, right? Consumer feedback, pricing, all of those components go into the algorithm. We want to get to a point where we have an algorithm that understands the consumer coming in and their trip purpose, right? Not there yet, but that is something that certainly as Jenna, I get more robust, we're aspiring towards that. That's a great segue into my next question. I know that Homs and Villas is rolling out AI search tools. How should homeowners interpret that shift? What opportunities are there or should they be fearful of commodization? And how do they make sure that they differentiate themselves between that opportunity and not being commoditized? Have great property descriptions. That is, I mean, you know, you guys as property managers are probably advocating and recommending have great property descriptions around the things and the type of guests that you are looking for. So if you feel like your home is a very thinly friendly home, then things like fire pits, pools, game rooms, you know, kids rooms, bunk beds, all of those things become more and more important as we go into the world of generative AI search. And so the thing that they can do best is really making sure that their property descriptions caters to the type of like stay experience that they're looking for. And so, you know, one of the things that we've seen fairly clearly as a pattern is that like consumers, when they come in and use our generative AI search, more than half of them actually have a location already in mind. And so, whether it's like Southern Florida or specific location like Tampa or Clearwater Beach, and what they need help with is sorting through the features, right? The number of bedrooms, the availability, a chef's level kitchen, you know, the accessibility to a grill, right? Things that may seem obvious, but for customers, if they have a very specific purpose, those are kind of some of the features that really resonate and an insider tip for your audience, you know, when we think about what are the things that consumers are looking for? Oftentimes water is key, proximity with water, walking to water, whether it's the pool, it's the community pool, it's the homes pool, it's the beach, it's the lake, those resonate quite a bit. And surprisingly, parking. Parking comes up as something that people are looking to better understand. Is it just me or my opinion or do you think that AI eventually becomes the ultimate one-size-fits-one search for somebody who's looking for a very specific property and for them to get a true fit to what they're looking for? It's not just you, I think that that is where the future is going, right? And it's interesting because as we talk, we do a lot of work around our next generation of consumers. And as we talk to Gen Z, Gen Z is not sufficient, right? It is one that helps to identify, but they're also looking at other places like TikTok and Instagram and Reddit to be able to help them narrow things down, and then they feed those things into Gen Z and so sometimes generative AI can be at the top upper funnel inspiration, and then oftentimes it's towards the bottom of the funnel as consumers are beginning to narrow to get to that one-to-one example. We're seeing a lot of the younger guests who are searching TikTok, doing AI, looking around, filtering well, and then finding a very small subset that's acceptable to this day, and then forwarding those on to their parents or grandparents who's paying for the stay. Yes. Same goes for all travel. We actually know that the key influencer in a family trip is off in the kids. Yeah. Particularly for kids between the ages of, I'd say, like a seven to 17. There's been a little shift, hasn't there? Yeah. Have you heard the old adage as a parent, you're only as happy as your least happy child? No. Right. I've never done that. And so every parent is like, oh God, before I spend all this money on this vacation, I'm going to pull my kids, right? Mm-hmm. And so is it, do you want to do Disney? Do you want to do, you know, a city and what type of features? And, you know, one of the things I think Orlando properties do really well are things like themed bedrooms and experiential offerings. And so you were seeing parents chucking with the kids on features. And so like if you're a parent and your kid loves to play pool and it keeps them excited ping pong and pool, you are searching for a house with ping pong and a pool. And our gender of AI search is trying to help you get there, but those are those are very key influencers. Jennifer, with all the technology now involved in travel, what part of the guest experience must stay deeply human? Oh, I'm in a human business, right? And there is so much that we talk about, how do you calibrate the balance between the human touch and the digital experience? And this is where making sure that you keep track of what broader consumers shifts are happening is so important. We do that a lot at Marriott. And so, um, could you imagine like 10 years ago this idea that you would consume most would actually prefer to go on an app to ask for an extra pillow that they don't want to actually pick up the phone and speak to someone about that? And that is like these transactional components are becoming increasingly important for consumers to have this ability to solve in their own hand. And that we kind of let the consumer lead to tell us like at what point do you actually want a human kind of in? And I think humans are incredible. The human service element is so incredibly important when things go wrong. I mean, we've all been on those infinite loops where you call a company and you have an issue and you get routed through their voicemail of buttons to push and you're like, I just want to talk to somebody representative, right? And so we know very clearly when anything goes wrong or the question is about creating a memorable moment that human component is incredibly important. Those are very difficult to solve without technology. And so oftentimes we think about the digital and technology solving the very transactional. Like, can I got a copy of my receipt? I don't want to be able to solve that. But the humans are critically important for the experiential component. And when we see reviews, it's always nobody's giving us a 10 out of 10 because that digital feedback was really efficient. They're giving us a 10 out of 10 because Lori from the property management company did an amazing job making sure the home was ready. And she gave us a list of restaurants to go to because she that were open late because she knew we were arriving late that night. Yeah, it's the attention economy right now. And we all are looking to be able to have attention from those who were interacting with as opposed to the technology. And I think that when you look at why people give you bad reviews, it's not because something went wrong. It's because they believe you don't care that's something went wrong. That service recovery can end up building that service recovery paradox where it gives you the opportunity to really build brand affection if done well and you restore the relationship as opposed to a transactional text that says we apologize you had a problem with the property we will get back to you as soon as possible. That's the way you get a bad review. So sure that's why Kevin with Shard leads our operations component and with our property managers, we will conduct workshop and sessions on how do you do service recovery. There's a very clear kind of methodology for that that we've used in our hotel experience and what does service mean? Like how do you deliver a human led empathetic service experience for the guests? We take all the best learnings that we have from our hotel and hospitality experience and do sessions with our partners. We should get into some of those sessions. Those are sound amazing. Over the next five years, how do you see global brands like Marriott influencing the values and revenue for homeowners within the vacation rural industry? I think it goes back to the insight that you delivered earlier Steve, which is like more and more consumers are looking not for standardizations but standards. These trips are high risk high reward. If you are the person who is assigned defining the home for the extended family, for the one week that we get off over the summer, over the year, it's a high risk endeavor and you really want to make sure you get it right. And so the role of companies who have the trust of the consumer becomes increasingly important and relevant. And so I think the opportunity for us at Marriott continues to grow. And for us, it will be a continued focus on quality and making sure that we get fantastic locations and destinations for our guests with great partners. Jennifer, if a homeowner remembers one thing from our conversation today, what do you think that should be? I think it should be. From a Marriott Homes and Villas perspective, we really are focused on the best gas, the best homes and the best experiences. And our continued growth in this area is our commitment to the space. And so quality over quantity. Jennifer, thank you so much for coming on key notes. I'm talking to our homeowners and to our franchise partners and to all our property managers. Really enjoyed having you on. I can't tell you how thrilled that was to find out I was going to be able to spend a little bit of time with you. Thank you again so much for this and everything you do for the hospitality industry, Marriott and with Costco. Of course, it was a pleasure to be on the podcast with you, Steve. And thank you, guys, for all the amazing work that you do to help bring great homes and make those available for these memorable experiences for our guests.