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Inside MarriottSeptember 9, 2011 By: Ruthanne Terrero
|Sustainability expert Dr. Virgilio Viana (left) explains to Marriott Interntional President and COO Arne Sorenson how the Amazon rainforest stores carbon and helps regulate the Earth’s atmosphere. Marriott pledged $2 million to help preserve rainforest in Brazil’s Juma Reserve.|
When Travel Agent met with Marriott International President and COO Arne Sorenson in Washington, D.C., earlier this year, he had just completed a trip to Shanghai, China, where Marriott has 17 hotels across its brands. There’s more to come in this city, where the Shanghai Marriott Hotel City Centre has recently opened.
But there was more to do on this trip: Sorenson headed to Ping Wu in Western China, which sits at the source of the Yangtze River. The area isn’t new to Marriott; in May 2010, the global hotel company had launched “Nobility of Nature,” a $500,000 commitment to help protect the source of fresh water for more than 2 billion people in Asia. Located in the mountains of Southwest China, the program helps rural communities develop sustainable businesses, such as mushroom farming and honey production, which reduce erosion and sedimentation and improve water quality downstream.
To say the area is remote is an understatement. Even after flying in, Sorenson and his team had to drive hours to reach it. The purpose was to visit a village of 120 families who historically had been beekeepers. The Marriott team had already connected the village with one of its food suppliers that is now distributing the honey in Marriott’s hotel gift shops throughout China. During this most recent journey, Sorenson and 10 Marriott associates gave a truck to the village, a gesture considered so important that the mayor and governor hosted a celebratory lunch.
“Since I’ve gotten back, there have been so many e-mails from every one of these associates, saying that the Chinese are saying, ‘you are changing our lives’,” Sorenson said. “If you really think all about, it’s not just about changing the world—although you can do that and it is important to—but it’s really all about connecting Marriott associates to the communities with whom they are doing business so they can be passionate about it.”
“In a sense, you can say it’s an environmental project and that’s true. You can also say it’s a Chinese project, and that’s true, but it’s not really any different from the ‘spirit to serve’ that Marriott has talked about for decades,” Sorenson said.
Growing in China and India
There’s no doubt that growth in the developing countries in Asia is a huge priority for Marriott, but Sorenson notes that there’s a big difference between the two most-talked-about emerging destinations: China and India. While they are both growing quickly, with “billion-people-plus populations,” their societies, government structure and economies vary greatly, as do their hotel structures.
Sorenson believes the Chinese economy will be as big as that of the U.S.’s in just 10 to 15 years. With that growth, he sees China’s current inventory of 1 million guestrooms easily doubling over the next 10 years.
|The recently opened St. Pancras Renaissance Hotel London originally debuted as a hotel in 1873.|
“India has infrastructure challenges and some other challenges, but we want to be there and to play in it,” he said.
Marriott has been in China longer, opening the JW Marriott Hong Kong in 1989. Since then, 51 hotels have been opened in the country, flying the Ritz-Carlton, JW Marriott, Renaissance, Marriott and Courtyard flags. Sixteen hotels are under construction in China.
Of note is that over the past few years, Sorenson said, Marriott hotels in Asia have seen their business shift primarily from American and European travelers who know the brands well, to Chinese travelers.
The tremendous effort going toward this challenge right now is “all part of building a global hotel business that can serve long-haul travelers, but building it in a way so that we are also the local hotel company in those markets,” he added.
On the other side of the world, Marriott is making inroads in emerging Brazil, where 50 “green” Fairfield Inns are in the works throughout the country, thanks to a preferred partnership inked last year with PDG Realty.
“Brazil is one of the world’s best stories about the growth of democracy and the stability of government, so there is tremendous opportunity there,” Sorenson said. “Over the last 20 years, they’ve had at least three changes of government that were all peaceful. They’re also rich with natural resources and have fabulous people,” he said, citing the 2016 Olympics in Rio de Janeiro as another plus.
Europe Growth Is Slower
Expansion in Europe poses a contrast, he said. “Europe is nothing like these newly developing economies; it probably has among the lowest growth rates, but Marriott has an enormous opportunity there,” said Sorenson, referring to the company’s reputation in size and branding. “Our share is relatively small. In Europe we probably have about 1 to 2 percent of the market.”
The company has strength in the U.K. (earlier this year, it opened the St. Pancras Renaissance Hotel in London) and in Germany. Until recently, however, it had “virtually nothing in Spain,” save for the highly lauded Hotel Arts in Barcelona, which is operated by Ritz-Carlton. Spain was fortified tremendously, however, when Marriott signed a joint venture in January with AC Hotels. The deal added 90 properties throughout Spain, Italy and Portugal, which will be rebranded as AC Hotels by Marriott. Sorenson expects another 20 AC Hotels to come on line in Spain and in Italy, where Marriott only has about 10 hotels.
“There’s no reason we couldn’t have many, many, many more,” Sorenson said. “We’ve got different initiatives under way to make sure we get the growth we should be getting in Europe.”
When asked if there is opportunity for Marriott to brand some of the iconic family-owned hotels throughout Europe, Sorenson said that’s where the Autograph Collection comes in. That moniker, launched in early 2010 with seven U.S. hotels, is for unique properties that want to make use of Marriott’s distribution and rewards system while giving Marriott a presence in cities that have high capital entry costs. Members, for example, include hotels in the eclectic Kessler Collection, the Cosmopolitan in Las Vegas, The Algonquin in New York and four hotels in Spain that came via AC Hotels. It’s expected there will be 30 to 40 Autograph hotels opened by year’s end throughout the U.S. and Europe.
Edition Hotels, a joint venture between hotelier Ian Schrager and Marriott, is another growth vehicle in the upscale market; Waikiki, Hawaii, and Istanbul, Turkey, are the first two cities with the brand.
Edition’s appeal to Sorenson is that it has a lifestyle element with a high level of service that doesn’t compromise the guestroom experience. He describes the Waikiki property’s guestroom as being “soothing.” He had yet to see the Istanbul property in its full form as of press time, although he’d seen it in hard-hat mode. Reviews thus far, he noted, indicate that guestrooms come off as “jewel boxes” and some of the best that guests had ever seen.
|The 100-room Grand Bohemian Hotel Asheville (N.C.) is part of Marriott’s Autograph Collection.|
Still to come in two years is an Edition on Miami Beach, carved from the former Seville Hotel on Collins Avenue, which has “three times the width” of many of the “shotgun lots” between Collins Avenue and the beach, said Sorenson. London will have its own Edition in about a year and a half at the 100-year-old-plus Berners Hotel.
“We’ve got another half dozen or so that are coming along,” said Sorenson of Edition.
In the U.S., Sorenson believes it will be a long time before we see some full-service development. Growth will come for limited-service properties because they tend to be more suburban sites, he added. At the same time, luxury travel is coming back, more so than in any other segment.
“We can see it in our hotels; the business traveler is holding that meeting, and if it’s a board meeting it’s got to be perfect,” he told Travel Agent.
|Arne Sorenson started at Marriott International after Bill Marriott personally asked him to join the company.|
Marriott International and Travel Agents
As Marriott continues its global growth, it continues to support the travel agent distribution channel with experts in its global sales offices around the world. It also has a 20-member team to answer questions about travel agent issues. It can be contacted at [email protected] or 800-831-3100.
Still going strong is Hotel Excellence!, a self-paced training program, which was introduced in 1999 in English, French, German, Spanish, Portuguese, Italian, Chinese, Japanese and Turkish.
Hotel Excellence! (hotelexcellence.marriott.com) covers generic lodging sales information in an interactive online format. Since the program’s inception, Marriott has certified more than 175,000 graduates in 53 countries. Four interactive modules were added in 2009 to provide travel agents with a fresh perspective of the current state of the travel business, as well as tools to help them sell to niche demographic and psychographic markets. Two of the newest modules focus on Marriott’s global presence, including in emerging markets such as the Middle East and Asia.
Upon successful completion, Hotel Sales Specialists (HSSs) receive:
#A certificate signed by J.W. Marriott, Jr. that attests to the agent’s proficiency in recommending lodging products
#Continuing Education Units for CTA/CTC
#Exclusive access to Marriott’s Fam-Tastic rates, which allow agents to earn up to 28 nights at Marriott hotels worldwide at rates starting at $44.
#The Reserved for You eNewsletter, including hotel openings, contests and incentives, etc.
Learning the Ropes
Sorenson didn’t start off in the hotel industry; in fact, he decided early on to study law because such a degree would allow him some flexibility in careers. His career intertwined with Marriott when his law firm handled the lodging company’s move to split off Host Marriott in the early 1990s. Ever the man of details, chairman and CEO Bill Marriott had Sorenson on the phone frequently as legal counsel throughout the week as the complexities of the transaction were worked through.
In 1996, Marriott called Sorenson to ask him to work for the company. Sorenson was game, but he didn’t want to work as a lawyer.
“The attractive piece of it to me was the change. I didn’t want to simply go someplace else and continue to do the same work. [Bill Marriott] said, ‘OK,’ and I said, ‘OK,’ and that was about as thorough as it was.”
He worked in mergers and acquisitions for Marriott for some time, “which was a perfect place to learn the industry, because we would go and look at one company after another and think, do we want to buy it, how much is it worth, what would we do with it, what would the brand strategy be, how would we staff it.”
That led to the acquisition of the Renaissance Hotel Group in 1997, a $1 billion transaction that is still considered a milestone for the company.
By 1998, Bill Marriott had asked Sorenson to become the company’s CFO.
“You could have knocked me off a chair, it was totally a surprise to me,” he recalled. “But it was a great job to be partnered with him and the rest of the leadership team at Marriott,” said Sorenson, who noted that it was quite untraditional to “take a guy who used to be a lawyer and ask him to be CFO. But it was a great opportunity to further learn about the business. It was fun.”
Two years ago, he was tapped to become president and COO of Marriott International, responsible for the performance and growth of all of Marriott’s brands and businesses.
One of the aspects Sorenson loves about the hotel industry is that it’s intellectually interesting. Of the 3,500 hotels across Marriott’s portfolio, “most are owned by someone else, with the exception of just about 10 assets,” he said. That brings Sorenson in close contact with the hotel developers and franchisees in the Marriott family quite often.
“Many of them own many, many hotels and we’ve been working together long enough so that we’re culturally similar, so we use the same language. And they build great hotels, they operate hotels wonderfully well, they take care of their people and they invest in their communities. When you get with those folks, it’s often like getting together with friends. We are dependent on them for our growth, and so we’re always thinking, how do you create these relationships so that they really work? And that’s a fun part of business.”