Bill Marriott’s Secrets to Success
- Oct 15, 2010
The Marriott brand has survived and sometimes thrived since 1929. How has it persevered while so many others have gone by the wayside? J.W. Marriott Jr. offered insights during a keynote session at the Urban Land Institute Fall Meeting:
Great Depression: Started months before the onset of the Great Depression as two root beer stands in Washington, D.C., the mom-and-pop business (specifically, Bill Marriott’s mom and pop) expanded into hot foods—cooked in their home kitchen—as the weather grew colder and later added window trays, creating the first drive-in restaurant east of the Mississippi River. As the company expanded into hotel ownership, it remained debt free, as Marriott’s father remained highly debt averse. That approach changed, however, during the 1950s as Marriott himself became convinced it was impossible to own so many hotels debt free, and he sold the properties without his father’s permission, retaining management responsibilities and launching the platform upon which the company continued to expand.
Late ‘80s/Early ‘90s Recession: Beset by debt like other companies, Marriott Corp. pursued “pretend and extend” strategies, unable to sell hotels in a recession, until in the early ‘90s Stephen Bollenbach, then CFO, convinced Marriott to split the company, separating the management and ownership components. Host Marriott Corp. was born, with Bollenbach as president & CEO from 1993 to 1995. Credit downgrades and lawsuits followed, but it did the trick and the management business started with a clean slate, Marriott reported.
Today: Marriott continues to expand by striving to meet the needs of today’s customers. Last year, it launched two new brands, Autograph and Addition. Autograph features iconic refurbished hotels, such as the Algonquin in New York City. Marriott said the company has been able to obtain properties through foreclosures that it was not previously able to purchase, and it has attracted half its business through the Marriott Rewards program and also benefited from online travel agencies. Addition is a boutique brand launched in partnership with Ian Schrager, with the first hotel opening today in Waikiki in Hawaii, to be followed by one in Istanbul, with Seville and Miami to come. Meanwhile, the company is obtaining 15 to 20 percent of its growth through conversions of existing properties.
“We have the platforms to grow,” Marriott said.