Marriott: In for the long haul

JEDDAH, Apr 09, 2009 (Arab News - McClatchy-Tribune Information Services via COMTEX) -- MAR | Quote | Chart | News | PowerRating -- The eponymous Marriott International was founded 80 years ago and there is still a Mr. Marriott, the son of the founder and, now 77, at the helm. He has, according to Ed Fuller, president and managing director of Marriott International Lodging who visited Saudi Arabia last week, "a mind like a steel trap." In a recession, positive news is rare, but Fuller takes the long view and, having seen the fluctuations in economies around the world during his tenure in the hotel business, is sanguine about the future. "This is a business that has nothing but growth written all over it, but you've got to go through the cycles. The grey hair says that I have been through cycles before; the good news is that I know we come out of them," he told Arab News. "I don't know the date but we will come out of it."

The Saudi market has changed since Marriott's entry in 1978 and is, according to Fuller, it is in a measured growth mode and is moving away from dependency on one source of income. "The country has the right focus and is moving ahead -- we want to be part of that," he said.

With nine new properties announced for the Kingdom and more in the pipeline, Fuller said that Marriott was fully engaged in Saudi Arabia.

Tourism would, he thought, provide some market growth but the main area will be the business traveler. "When we opened in the 70's, Saudi Arabia was one market. The group and meeting market has grown in Saudi Arabia and it's a significant market. It will continue to grow because the Kingdom will expand its businesses. That generates meetings business as well as individuals. Saudi Arabia is less impacted than the rest of the world -- it's refreshing to be in the Kingdom, hear the occupancy rate and be encouraged."

The core of Fuller's positive outlook is founded on three pillars: Marriott International is a family business; the understanding that the global market is a fact; and thinking strategically and long-term rather than taking the short term view. One family that still holds 23 percent of the stock in the publicly held company has run Marriott International for about 80 years. Many hotel companies have frequently changed hands and core values. With Marriott the corporate culture, thought Fuller, the philosophy and the values were totally consistent.

"Bill Marriott was here five years ago and all the staff has pictures with him -- and the staff remembers him. It's a genuine family business, we're all cousins."

That he said translated into short-term strategies of sharing, working together and most especially in innovative marketing to address the challenges of the recession. "We do a lot of innovative marketing in this kind of situation. We take steps to make sure that our brands are positioned right and negotiate hard to make sure we get the right kind of business on the short term."

Marriott International has concentrated on becoming a global brand for the last 15 years. With the exception of Hawaii, the Caribbean and a handful of global destination cities, the hotels run at less than 17 percent American occupancy outside mainland US.

The Chinese will inevitably be the largest traveling public in the world; already they are the second largest group. Ten years ago, they did not register on World Travel and Tourism statistics. Fuller said that investing in China led to brand awareness and resulted in the traveling Chinese lodging with a brand they were familiar with.

"People judge the brand by what they have in their community. Our relationship in Saudi Arabia is based on our long-term exposure to the market," said Fuller who thought this a perfect example of global and long-term strategies.

The recession has eliminated any confusion about business having to operate in a global market. Anybody that doubted that, he thought, got a dose of how global business was, probably through bad news. "The country that remains isolated and puts protection around itself is the country that is going to lose. Any business that is not thinking globally is going to get left out."

It is the long-term view that underpins Fuller's confidence in the future health and growth of Marriott's business.

"The world today will go through its cycle. But in five, maybe seven years of prosperity we know, as do the aircraft builders and others who study air travel, leisure travel will be the number one growth market."

He identified new source markets; India whose traveling public rapidly increased from three million to seven million annually in the last few years and is still growing; China; and the Middle East. "And the Russians are coming. They are everywhere -- Caribbean to Thailand -- to the extent that we had to move Russian-speaking staff into our Thai resorts."

With no new markets, opined Fuller, the hotel industry may well have found itself in the doldrums. "With all these new source markets coming in so the need for hotels, destinations and resorts is going to be that much greater. It's just a matter of time."

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