Why Marriott is number one...
India’s largest hotel chain is – no kidding! – Marriott. And Arne Sorenson is its global headUpdated: Apr 28, 2018 23:01 IST
Earlier this month, the Marriott chain opened its 100th hotel in India – Sheraton Grand Bengaluru Whitefield Hotel & Convention Center. The significance of the 100th opening had Arne Sorenson, President and Chief Executive Officer, Marriott International, flying down to India from the US to do the honours.
While the Sheraton Grand, Whitefield, is nice enough, the Sorenson visit helped re-emphasise what few people outside of the hotel industry realise: Marriott is now the biggest hotel chain in India. Bigger than Taj, Oberoi, ITC, ITDC or any of the familiar names we grew up with.
What’s more, Marriott is also the largest chain in the world with 6,500 hotels in 127 countries and over 30 brands. Nearly every global hotel brand that you have heard of is now owned by Marriott: Sheraton, Westin, JW Marriott, Le Meridien, Renaissance, Courtyard by Marriott, Fairfield by Marriott, Ritz Carlton, St. Regis, Bulgari Hotels and Resorts, Luxury Collection, Edition, W and many many more.
As head of Marriott International, Sorenson is the world’s leading hotelier, leading a company with a strong presence in nearly every country in the world.
And yet, when Sorenson has been in the news in recent years, it has been because of the positions he has taken on important political and social issues.
In 2016, Sorenson wrote an open letter to Donald Trump asking him to take a collaborative approach to governing, to give equal rights to LGBT persons, to not adopt a needlessly hostile approach to illegal immigrants to the US and to make America safe without rudely shutting out those who want to visit it. At other times, he has publicly opposed Trump’s Muslim ban.
American executives are more outspoken on political issues than Indian businessmen. But even by the standards of US business, these were brave and honourable things for the head of one of America’s best known corporations to do and say.
I asked Sorenson about the political positions he had taken when I met him in Delhi. He answered carefully that while he was a registered Democrat, he had voted for candidates from both parties. So his positions had nothing to do with party politics.
So why, I asked, was he so ready to publicly take stands that were so directly opposed to what the US President appears to believe in?
Sorenson is especially enthused by Shaadi By Marriott, which has been a grand success
The reason he said, had to do with greater human values and not with adversarial politics. As a global company, Marriott embraces diversity and opposes any kind of discrimination. For instance, the company has LGBT employees whom it regards as full partners in the business. It was his duty as CEO to speak up for their rights.
The same was true of his stands on immigration, the so-called Muslim ban and other such issues. If Marriott operated in so many different countries then, almost by definition, it embraced diversity. And the values he spoke up for – an end to narrow-minded divisions and a more global approach – were the values that Marriott embodied in its operations around the world.
It was a good answer: logical, reasoned and studiously apolitical. But it also seemed to me to be the truth. You can’t really run the world’s largest hotel chain unless you follow an international agenda, oppose and eschew narrow-mindedness and openly celebrate diversity.
At the same time, Sorenson’s remarks reflected a break from the traditional attitudes of large American hotel companies. In many ways, Marriott is the most American of these companies. It was almost the last to spread its footprint around the world and focussed originally on its massive US operations. While Hilton and Intercontinental were opening five-star hotels all over the globe, Marriott was still building senior citizen residences, theme parks and institutional catering facilities along with hotels at all price points in America.
It is only over the last two decades or so that Marriott has spread its wings and become a truly international group. It entered the premium space with the acquisition of 49 per cent of Ritz Carlton in 1995 (it bought a majority of the company three years later). And the big change came in 2015 when Marriott acquired the Starwood hotel group.
Starwood was a 1990s phenomenon, a corporate giant that took over existing hotel companies with their own histories (Sheraton, Westin, Le Meridien, etc.) and also created its own brands including the upmarket St. Regis and the trendy W hotels.
The moment Marriott International acquired Starwood, it not only became the world’s largest chain but it also took over a diverse collection of international hotel brands. The good thing about the takeover is that Sorenson values diversity and respects the heritage of the Starwood brands.
The bad thing is this: can any hotel company really handle 30 brands? It’s good to be big in this business but even so, isn’t Marriott International now just too big?
It is another measure of how much the hotel industry is changing that Sorenson answers the question by using tech parallels. Assume you went on Expedia, he says, to look for a hotel. You would see various hotels at different price points for each destination you selected. The one you finally chose would be a hotel that gave you the rate you wanted, had a location that met your needs and was run by a company (or brand) that you liked.
Marriott International, Sorenson says, is now in the same sort of position as Expedia. Because it has so many hotels at so many different price points at so many locations, it lets you find a hotel that meets your requirements within the Marriott system. Moreover, no matter which Marriott hotel you choose, you will get loyalty points.
In today’s age, he argues, that is a huge advantage.
He is right, of course. But for the model to work, each brand must have a distinctive identity and add value to the range of options.While Marriott has always tightly controlled its own branding, it has now inherited Starwood’s branding problems.
Too many Starwood brands have no real identity. Even since Air France sold Le Meridien, the hotels have moved away from their French identity without finding anything new to put in its place. Sheraton, Starwood’s bread-and-butter brand, stands for nothing. And it is hard to see Westin as much more than a health club with rooms attached.
Another problem is that because Starwood was so keen to show growth, it did not deflag hotels where owners were not respecting brand standards. It also signed up nearly every hotel owner who approached it, without worrying too much about the calibre of the property.
Sorenson is unwilling to badmouth Starwood but he concedes that some work will have to go into refocusing the brands and that perhaps some hotels will have to shape up or leave the system.
He is less worried, he says, by the apparent conflicts between the old Starwood brands and their Marriott equivalents. For instance Ritz-Carlton competes in the same space as St. Regis but he thinks both can co-exist.
Nor is he concerned about the irony of the W acquisition. W was created by Starwood as a cookie-cutter, self-conscious, corporate rip-off of the hip hotels that Ian Schrager pioneered. Marriott signed Schrager up a few years ago to jointly launch a new range called Edition and those hotels continue to open all over the world as 21st Century reimaginings of the hip hotels that Schrager invented.
So how does Sorenson feel about heading the company that has both Schrager and W, the brand that is the corporate rip-off of Schrager’s vision?
He responds that while W now has its own massively successful formula, the Editions will be different. Perhaps they will be smaller and more sophisticated.
Which brings us, finally, to India. One consequence of Marriott’s growth has been that the Taj, which never included Ginger hotels within the group, has now suddenly started counting Ginger as Taj hotels to seem bigger than Marriott. That doesn’t worry anybody at Marriott too much where they continue to emphasise quality over number. (Unlike Starwood, I am guessing that Marriott will deflag hotels that don’t meet brand standards even if that brings down the total number of properties.)
Sorenson is pleased (obviously) with Marriott’s success in India but he seems specially enthused by the Indian company’s recent initiatives. Shaadi by Marriott has been a grand success and in the months ahead, Marriott will tackle the one area where (so far, at least) it has no great reputation: food and beverage. This is difficult to do because unlike say ITC, The Oberoi or the Taj, Marriott does not replicate restaurants across its Indian properties. So hundreds of individual restaurants have to be configured to fit into a single campaign.
Sorenson is optimistic that in this area too, Marriott will make progress. But he is not underestimating the competition. “One of the great things about India” he says, “is that you have such great hotel companies like the Taj and the Oberoi and of course ITC, which we treat as part of the family because of Luxury Collection.”
So does it feel strange that an American company is India’s leading hotel chain?
Probably not. Sorenson is a proud American. But at Marriott, these days, the focus is less on its American origins and more on diversity and internationalism, whether in the hotels themselves or in the stands that Sorenson has taken.
From HT Brunch, April 29, 2018
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First Published: Apr 28, 2018 21:53 IST