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J.W. "BILL" MARRIOTT JR., 76, (CQ-HE WILL BE 77 ON MARCH 25 '09) HAS SEEN CYCLICAL UPS AND DOWNS IN THE HOTEL BUSINESS SINCE 1956, WHEN HE STARTED WORKING AT THE COMPANY HIS PARENTS FOUNDED ON A CHAIN OF SMALL RESTAURANTS IN 1927. IN AN EXCLUSIVE INTERVIEW FOR THE PREMIER ISSUE OF HOTELIER INTERNATIONAL, MARRIOTT, A SOFT-SPOKEN MAN WHO IS KNOWN FOR HIS ATTENTION TO DETAIL IN HIS HOTELS AND HIS DISINCLINATION TO SEEK THE PUBLIC SPOTLIGHT, TALKS ABOUT HIS OPTIMISM THAT THE LUXURY HOTEL INDUSTRY IS WELL-POSITIONED TO THRIVE ONCE CURRENT TURBULENT ECONOMIC CONDITIONS PASS. IN RECENT YEARS, MARRIOTT INTERNATIONAL'S RITZ-CARLTON HOTELS HAVE BEEN ON AN AGGRESSIVE INTERNATIONAL EXPANSION CAMPAIGN, AND THERE ARE NOW ALMOST AS MANY RITZ-CARLTONS OUTSIDE THE UNITED STATES (32) AS THERE ARE IN THE COUNTRY.
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JOE SHARKEY: With the economy battering the hotel business right now, and especially impacting luxury hotels, what advice do you have for the industry, given your long experience in good times and bad?
BILL MARRIOTT: Keep your eye on the ball. That involves a whole lot things. One, we are doing our best to keep as many people employed as we can. The other thing is to take costs out of the operation in a way that doesn't impact the guests. We've had three or four really good years in this business, and you get fat. Now we're buying and using energy more carefully. A lot of us are taking fresh flowers out of the lobby and substituting plants and things like that, that we don't have to replace every day. We're looking at some of the amenities we put in the bathrooms, and we're looking at food specifications to see if we can have some alternative products on our menus that are just as good. We're looking at tighter scheduling of labor. But we want to make sure that it's as seamless as possible for our guests.
JS: You just did a $40 million renovation at the Portman Ritz-Carlton in Shanghai. Do these kinds of major capital initiatives now slow down?
BM: Fortunately, we've just completed a major renovation in about 20 of our biggest hotels, working mostly with Host (Host Hotels & Resorts, the lodging real-estate company) but also with a bunch of other owners. I'd say our bigger hotels are in better condition today than they have been since they opened. We got that done before the downturn started, and the owners will reap the rewards.
JS: What's your outlook for the luxury hotel niche once the economy settles? Is there an excess of supply worldwide?
BM: I don't think there is an oversupply. Luxury as a major category emerged really in the last 10 years. Ten or 15 years ago, most luxury hotels were independent, not chain-related. Going forward, we think the luxury hotels will do extremely well.
JS: Buying the Ritz-Carlton brand in 1995 was your initiative to move Marriott firmly into the luxury niche, in the U.S. and internationally. You now have five Ritz-Carltons in China with at least four more in development there. How do you see Ritz growing? |
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BM: Well, we saw a real opportunity in acquiring Ritz-Carlton. We needed a luxury brand and we thought we could grow it. The luxury brand has a huge appeal in the United States, but an even a larger appeal outside the U.S., in China and throughout Asia, in India and the Middle East. That's where most of the luxury hotels are being built today. International development is very important to us in general. In China we actually have six or so being planned. We have a fabulous Ritz-Carlton that is the market-share leader in Tokyo. We're going to be re-flagging the Nile Hilton; they're going to totally re-build the hotel to make it into a Ritz-Carlton. And who would ever have thought of a Ritz-Carlton in Moscow? Now we have one there that is making a lot of money, at very high room rates, with good occupancy. It's one of our star properties.
JS: One phenomenon of the current economic cutbacks is that, partly because of the concern about perceptions, corporate spending on luxury hotels, including the all-important meetings end of the business, has been sharply curtailed. Oops, your top luxury brand happens to have a word in its title, "Ritz" that is a synonym for the high-life. Is that a problem?
BM: (Laughs). "Well, the name Ritz is universal for luxury. 'Putting on the Ritz,' and so forth. Ritz-this and Ritz-that has defined luxury for about a hundred years. So yes, there's a little bit of concern today (about seeing the name "Ritz" on an expense account). People will get over that. A lot of luxury products are temporarily sidetracked, but they'll come back and come back strong.
JS: Hotels are generally a fun business, especially during the recent run of good times. But luxury hotels, as you know, can be targets for terrorism. The Marriott Hotel was destroyed during the 9/11 attacks on the World Trade Center; a terrorist truck bomb killed 54 and created severe damage at the Marriott Islamabad in September 2008; in August of 2003 a terrorist car bomb killed 12 people at the JW Marriott in Jakarta. How do you see the need for a luxury hotel to be publicly available, including to local traffic in its restaurants and nightclubs, with the need for security?
BM: Security is a huge issue depending on the country and the situation. In Islamabad, we would have had a lot more injury and death had we not had very tight security in place. The same in Jakarta. We have security, for example, to make sure that vans and trucks don't get close front entrances. In some places, we have security people almost on the street directing people in and out of the hotel. But you simply have to be much more careful.
JS: Your long-term outlook?
BM: Experience shows me that things work out. The long-term forecast by the World Travel and Tourism Council is that international travel is going to continue growing by 6-7 percent a year well into the future. You have these emerging markets in China and India, and an emerging high-end market in those countries. There a lot of people traveling today from these countries that never had an opportunity to travel before. The Russians particularly are traveling and buying luxury goods. There has been a worldwide demographic shift in terms of the people who are traveling.
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JOE SHARKEY, who has written a weekly business-travel column for 10 years in the New York Times, was previously an editor and reporter for the Wall Street Journal. His work has appeared in publications around the world, including the Times of London Sunday Magazine. He has written five books, including a novel. His next book, "High Anxiety," to be published in late 2009 by Henry Holt & Co,/Times Books, is a look at global air travel in a new era. He and his wife, Nancy, live near New York and in Arizona with their two loquacious, opinionated parrots.
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