Marriott Outlines Aggressive Global Growth Plan
<B> Marriott Outlines Aggressive Global Growth Plan</B>
By Maria P. Vallejo
<I>Washington, D.C.</I> - As mergers and acquisitions swirl across the face of the hospitality industry, Marriott International plans to maintain its standing among the industry's largest players by adding 500 hotels by the end of the year 2000. "We are going to attempt to become a global consumer launching brand," vowed chairman J.W. Marriott Jr. "We have the growth machine, and the growth machine is moving."
While reflagging the 1,500th Marriott hotel in San Francisco early this month, Marriott said he expects to reach the 1,700 mark by the end of this year, and add 150 more hotels, mostly in the United States, every year thereafter. About 125 full-service hotels will spring up in business destinations nationwide, while barriers to entry in major cities will restrict the 250 limited-service hotels to secondary and tertiary markets.
All the existing and new hotels will be linked to Marriott's reservation system, MARSHA, and the Marriott Rewards frequent guest program. Sales and marketing forces will be unified for all 10 Marriott brands. Marriott Rewards will allow 100 million members to earn and redeem points at more than 1,300 participating hotels and resorts.
Marriott also expects to see growth in foreign markets with its Marriott, Renaissance, Marriott Executive Residences and Ramada International brands. It is targeting Latin America, the Caribbean and Eastern Europe, with a smaller investment in Western Europe. "It's a worldwide global growth pattern that we are embarked on and that we're committed to," Marriott said.
Marriott's acquisition of Renaissance last year brought 150 Renaissance and New World hotels in 20 countries new to the Marriott name. The New World brand will be confined to China, but Renaissance is breaking into new international and domestic markets. Its induction into the Marriott portfolio allowed Renaissance to grow in the United States, where its previous attempts at expansion had been shunned.
"One of the biggest challenges we had was the ability to do deals in the U.S.," said Robert Olesen, brand vice president for the Renaissance Hotel Group. "We couldn't crack this market until literally the week after the acquisition closed. It's a tremendous growth story that we are now enjoying solely as a result of being hooked up to what is perceived as a tremendous revenue engine." With 58 hotels already in the pipeline, including 25 conversions and 33 new construction properties, Renaissance will comprise a large portion of the Marriott expansion project.
Like many hotel companies, Marriott also is honing in on deals in Asia. The New World brand makes Marriott the largest international hotel company with a presence in China, where it will have 15 or 16 hotels by the end of 1998. New World's other Asian properties, in about seven countries in Southeast Asia, were rebranded as Marriotts or Renaissances, Olesen said.
Marriott's newest product introductions are expected to also shine with this expansion project. The latest brand, Marriott Executive Residences, is expected to reach the largest untapped markets worldwide with growth in new hotels scheduled in gateway cities overseas. Executive Residences are designed specifically to house expatriates.
Fifty TownePlace Suites hotels will open by year's end, reaching a total of 100 hotels by year-end 2000. The moderate price, extended stay brand has two properties currently open. Fairfield Suites, the extension of Fairfield Inn brand with three hotels open, will add about 100 more hotels within the next five years.
Marriott is banking on a smooth economic ride through the next few years to help fuel its expansion plan. In 1998, revenues are up from corporate buyers, meeting planners, business travelers and meeting attendees.
"Businesses are spending like they did in the '80s," Marriott said. "They have a group meeting, they have fine banquets, rather than sending everyone out to buy a hot dog, like they did in '91, '92 and '93.