Bill Marriott and Ian Schrager make odd bedfellows in hotel world
As one of the biggest hotel groups goes boutique, can Bill Marriott
make a deal with Ian Schrager work?
Gerard Baker
From The Times
April 14, 2008
At 76 years old, Bill Marriott could never be mistaken for hip. The
chairman and chief executive of one of the world's largest hotel
companies is the model of traditional conservative American values.
His idea of cool is probably a long glass of iced lemonade on a warm
day.
The hotels in the 3,000 properties-strong business that bears his name
exude an air of reliable, solid, perhaps slightly fusty, conformity.
Even its top brand, the rapidly expanding luxury Ritz Carlton chain,
consciously recreates an atmosphere of teak-furnished, chintz-
upholstered, old-fa****oned elegance.
Yet in a testament to the spirit of change that animates successful
business leaders, Mr Marriott recently acquired a new and quite
unusual best friend. His latest - improbable - bedfellow is Ian
Schrager, the enfant terrible of 1970s New York, known for style-led
boutique hotels such as the Sanderson in London and Morgans in
Manhattan.
The two men signed a deal last year to start a new brand of high-end,
super-trendy, luxury hotels called, in a very postmodern, unMarriott
sort of way, Edition. The first is set to open its doors in Los
Angeles in 2010, closely followed by properties in Paris and South
Beach, Miami, and at least ten more after that.
It has been described as one of the strangest pairings in capitalism:
the upstanding Mormon who started life as heir to the rootbeer stand
in Wa****ngton DC owned by his father, and patiently built one of the
world's best-known brands; and the fast-living New York party king,
the ageing monarch of style and creator of the modern "boutique"
hotel, who once spent time in a federal prison for tax evasion.
Mr Marriott seems faintly bemused by the cultural frontier he has
crossed. "Earlier this year we announced the new Edition name in LA
and we had a big party. It was so noisy you couldn't hear yourself
speak. I was asked to say a few words and I said this was the craziest
party I've been to since high school," he told me.
It was, Mr Marriott happily acknowledged, the success of Starwood's W
Hotels chain - one of the few real marches that the rival hotel group
has stolen on him in the past decade - that inspired the partner****p.
Critics have wondered whether such an unusual pairing really can work.
It is hard to imagine the two men having anything in common other than
the fact that they both spend a lot of time in hotels - more than 300
nights a year, in Mr Marriott's case - but the older man insists that
the fit is a good one.
"Ian [Schrager] is responsible for design, for the concept, the
creativity of it and we'll be managing and marketing the hotels. We'll
use his PR ability and his ability to create products that drive
demand," he said.
I asked Mr Marriott if his staff had noticed any signs that he had
become hipper since he started his new partner****p. "I'm still the
same old conservative guy - still wear a tie. Ian will not wear a tie
- I don't think he owns a necktie."
Sure enough, when we met, Mr Marriott was in grey business suit and
tie - even in the casual surroundings and cir***stances of a 76th
birthday celebration and family reunion at Marriott's Camelback Inn in
Scottsdale, Arizona. Later, when another new Marriott partner, the
superchef Laurent Tourondel of the BLT French-American steakhouse
chain that is sweeping America, came by to cut a special birthday
cake, Mr Marriott was still soberly attired in the Arizona heat.
The American recession is on the front of every business leader's mind
and for Mr Marriott, the business cycle is a familiar, if painful,
acquaintance. "There've been six [recessions] since 1960 and I've been
in every one of them," he noted with a smile. Yet even he is a little
concerned about the unpredictability of the latest downturn.
"The thing that's different about this one is the tremendous amount of
uncertainty," he said. "Nobody really knows how much more of a hit the
sub-prime situation is going to cause financial institutions."
The hotel business is highly susceptible to the cycle. Mr Marriott
says that occupancy levels in the hotel industry in the United States
are likely to record a slight decline this year, for the first time
since after the terrorist attacks of 2001 - a little under 1percent.
Revenues continue to grow, although at a slower pace: revenue per
available room is expected to be up by 3 per cent this year, down from
6 per cent and 7 per cent increases in the past two years.
For Marriott, a third of whose revenues now come from outside the US,
the rest of the world is a comfortable cu****on against the weakness in
America. Half the new rooms that Marriott is opening are outside the
US, with continuing growth in Asia, Latin America and the Middle
East.
Europe has been less impressive, but London continues to churn out
high revenues. Mr Marriott notes the city's status as an international
centre and marvels at the influx of long and short-term guests - from
Russia, in particular, wryly noting the change in his 50 years in the
hotel business: "We used to think they were going to blow up the world
and now they're going to buy up the world."
Marriott's global role is not something that many would have predicted
when the company was founded by Mr Marriott's father in 1927. After
the famous rootbeer stand and its offshoots, Marriott Sr moved into
the lodging business, but it was his son who built it into an empire.
Even then, Mr Marriott displayed a canny flexibility that proved
critical to the company's growth.
The teetotal Mormon family faced an early ethical dilemma as they
expanded. Their first few hotels had been in dry states, but with the
op****tunity to open in Philadelphia came a challenge: "We were either
going to stay in the hotel business and sell liquor or not sell liquor
and get out of the hotel business. We couldn't put a sign out front
saying we were members of the LDS [Latter Day Saints, the Mormon
Church] and wouldn't sell drink - we'd have got all the Mormons
staying with us, but that's all." Today, ethical challenges can also
be business op****tunities. Like many cor****ate leaders, Mr Marriott
has come under pressure to deal with the company's large carbon
footprint. In addition to the usual energy-saving measures that are
becoming standard in hotels - less frequent laundry, efficient-
flu****ng lavatories and longer-lasting lightbulbs, the company
recently began to reserve parking spaces at cor****ate HQ for hybrid
cars. Last week Marriott signed a deal with the Brazilian state of
Amazonas to help to protect 1.4million acres of endangered
rainforest.
Critics are sceptical about what they see as PR initiatives even as
the company continues to pursue growth, but Mr Marriott insists that
he is a firm believer in the challenge of global warming - "We don't
want ten feet of water in New York City running down Broadway."
Mr Marriott still likes to get a direct feel for what Marriott guests
think about their hotel experience. These days, however, when he stays
at his hotels, the management always knows in advance that he is
coming. As a result, he admits, he feels a little like the Queen, who
is said to have gone through life thinking that the world smells of
fresh paint.
Mr Marriott has started his own blog (blogs.marriott.com) as a way to
keep in touch with his customers. "To a lot of people in the world,
cor****ations are faceless and don't have any soul or spirit behind
them," he said.
"I think people like to know what I do; that as CEO of this company I
still like to go to the movies with my wife on Saturday afternoons.
That I put my pants on one leg at a time like everyone else." Another
thing, we can only presume, that he has in common with Ian Schrager.
The leader questioned
If you could change one thing in the financial and commercial
environment, what would it be?
A lack of focus on employees and customers and too much focus on short-
term results
Who is or was your mentor?
My Dad
Does money motivate you?
Success and growth motivate me - money is an offshoot of that, but not
the primary motivation
What is the most im****tant event of your working life?
June 16, 1956 - the day I came to work for our company
What gadget must you have?
A cellphone
What does leader****p mean to you?
It means embracing a lot of different opinions and being a great
listener
How do you relax?
With family - kids, grandkids; dining out; going to the movies
CV
Born: March 25, 1932, Wa****ngton
Educated: University of Utah
Career: US Navy 1954-56; Marriott Cor****ation 1956-present (president
1964; chief executive 1972; chairman 1985)
Family: Married to Donna Garff, four children, fourteen grandchildren
http://www.truthandgrace.com/mormonnews.htm
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