Marriott Buys Renaissance - 1997-04-14

<I>Washington, D.C.</I> - Wrapping up its billion-dollar acquisition of the Renaissance Hotel Group this month, Marriott International has gained an Asian development partner as well as its 10th brand. The chain, now spanning about 1,300 hotels in 50 countries, had sought a second full-service brand to debut in cities already chock-full with Marriotts, said chairman and chief executive officer J.W. Marriott Jr.

The chain will retain the Renaissance name but has not yet decided whether it will add a Marriott tagline to the 150-property brand, Marriott said. Some Marriotts, however, will switch to the Renaissance flag and vice versa.

While Marriott gains the Ramada brand outside the United States-the Renaissance group owns the Ramada brand, licensing the name in the United States to HFS Inc.-Marriott said the chain would not take on the U.S. Ramada hotels.

"We will obviously have some conversations with HFS," Marriott said. "I just don't know how they will turn out. We're not sure yet how strong the international Ramada brand is, though we suspect it is stronger than the U.S. brand."

As part of the Renaissance deal, Marriott also has forged a strategic alliance with Hong Kong-based New World Development Co., the principal Renaissance shareholder prior to the transaction.

"We needed a partner who really knows how to develop in Asia and China," Marriott said. New World currently ranks as China's fourth largest hotel company, following Holiday Inn, Shangri-La and Sheraton.

Stateside, Marriott needed Renaissance "because there are some markets where we couldn't put another Marriott," the chairman said.

Atlanta, for example, offers about 47 Marriott and three Renaissance hotels. "We don't want to put a Marriott across the street from another Marriott, but we would put a Renaissance across the street from a Marriott," Marriott said.

As the next step, the chain will need to paint distinct identities for the two upscale brands, to ensure that each appeals to a slightly different market, said Rufus Schriber, Marriott's senior vice president, brand management.

While the chain will continue to scout for new brands, it will never add a budget tier, Marriott said.

Meanwhile, the Washington-based hotel chain has joined the Hotel Clearing Corporation travel-agent commission payment program, effective this June.