|The Boston Globe|
Knight Ridder/Tribune Business News
Aug. 15, 2004 - When J. Willard Marriott Jr. popped into Boston recently, it was an opportunity to talk with one of the most recognizable names in the world about the business he knows best: hotels. From a conference room in the Marriott Copley Plaza, the 72-year-old chairman and namesake of the 2,700-hotel Marriott Hotels International chain spoke with Globe reporter Keith Reed on security, on why hotels can raise rates again, and why it costs so much to make a phone call from a hotel room.
QUESTION: Are things beginning to pick up in the hotel marketplace?
ANSWER: We're very positive in terms of business travel beginning to pick up. We feel good about the leisure market. We have some pricing power, which we haven't had for years.
Also, our revenue per available room, the benchmark for how we measure our growth in sales, has improved about 9 percent in the second quarter of this year, and we hope we'll improve for the year about 6 to 8 percent.
Q: Have you seen improvement in New England?
A: Boston is very technology-oriented. Particularly the outlying hotels, they're trying to get some lift now from the business improving in the technology sector. They're coming back nicely, but they've also been down a lot in the last few years compared with downtown Boston, which is more diversified.
Q: What are your plans for your hotels in New England?
A: We're continuing to grow here. We're working on plans to develop a hotel along the new [Boston] convention center, a Renaissance Hotel at the Seaport.
Q: It's been tough to develop new hotels. Is that changing now?
A: We've been averaging between 25,000 and 30,000 new rooms for the last five years, and we'll continue to do that. Now, we've got a lot of brands, so you can go with Courtyard, or Fairfield, Marriott, Ritz-Carlton, or Residence Inn, and we've got a lot of franchises, so there are people helping us grow. Also, we're an international company, so about 25 percent of our growth is overseas.
Q: How have you been able to do that much building in a tough financing environment?
A: We have partners, we have developers, we have people who have been doing them for us. And we've been considerate. We're putting in equity financing, we've been putting in mezzanine debt and in some cases we've been doing finance guarantees. You have to do it to get into the big $200, $300 million hotels. You have to have help sometimes.
Q: What's the strongest brand you have right now?
A: Right now, the strongest revpar [revenue per available room] growth is Ritz-Carlton. It took more of a dive, and it's coming back very strong. People are loosening up a little bit and are spending more money, and they have more money in their pockets.
Q: How do you feel about the threat of al Qaeda going after so-called soft targets such as hotels?
A: Everybody's worried about terrorism. There's nothing you can do except be sure that you have the proper security procedures in place, which we do.
Q: What specific regions are you worried about?
A: Everybody continues to be on high alert in New York, and Washington is close to New York in terms of being a target.
Q: What specific security procedures do you have in place?
A: At the Marriott Marquis [in New York], when you pull in the driveway you open the trunk -- everybody, including me. They get me every time I go there.
We have procedures that kick in when the terror alert status goes from yellow to orange to red, and they can go from not allowing delivery trucks, not allowing people to park in front of the hotel. All the hotels have security procedures, and we pay a lot of money for it, and it's very visible.
Q: Is it true that you approve all of the new carpet and wallpaper that go into your hotels before renovations?
A: I do a lot of it, probably 80 percent of it.
A: The fixtures in the hotel speak to the quality of a hotel. It all adds up to what the company stands for. We've always used color, because we want people, when they enter the property, to think that it's clean and bright. We've always used carpet that has designs in them. You put a white carpet in here, and you have to take it out in six months. But if you have a dark carpet with a dark pattern, it can last for seven years. This is big dollars, huge money.
Q: So how often are you looking at wallpaper?
A: Twice a month, I spend about two to three hours. They bring in a design board with all the fabrics and colors, and I review it all. I've been doing it for 50 years.
Q: When you travel, do you always stay in a Marriott?
A: Mostly. If I'm somewhere where we don't have a property, then I stay somewhere else. But I'm in our hotels a lot.
Q: When you stay at a Marriott, do you stay in a regular room, or do you use the presidential suites?
A: I get a regular room. The only criteria I give is that I want a quiet room. I want to sleep.
Q: What have you learned recently from looking at another hotel chain?
A: Starwood's beds are something that we've all been interested in, and watching. We're thinking about rolling out a whole new bed package in the first quarter of 2005, and it'll be very much along the line of Starwood's beds. Customer acceptance has been terrific on those beds.
Q: Why is it so expensive to use telephones in hotel rooms?
A: In a hotel, you have a whole cadre of people who answer the phones and take the messages for you. You have your own personal answering service. So we try to cover those expenses.
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