Marriott reaches goal, sets another

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WASHINGTON -- Marriott International opened its 2,000th hotel in late April, fulfilling its goal to have 2,000 hotels by the end of 2000 with plenty of time to spare, but already the Washington-based company is moving on to bigger game.

The 2,000th hotel, the Tampa (Fla.) Marriott Waterside, represents an undisputed milestone for the company, which began in 1927 as a small root beer stand.

"Obviously, we feel very good about it," said Scott Melby, senior vice president for feasibility and planning at Marriott. We targeted 2,000 hotels by the end of 2000 several years ago, and we're very pleased with the accomplishment."

From that original root beer operation, Marriott's growth has been accomplished in an array of brands: Marriott, Renaissance, Residence Inn, Courtyard by Marriott, Fairfield Inn by Marriott, TownePlace Suites by Marriott and SpringHill Suites by Marriott.

The company also owns Ramada International and Ritz-Carlton, which essentially operates independently.

But Marriott is not resting on its laurels. The hotelier's new goal is to have 2,600 hotels and 480,000 rooms by the end of 2003.

A daunting figure? Apparently not.

"I'm comfortable with it," said Melby, who added that two-thirds of the additional 600 properties are already in the development pipeline.

According to Melby, depending on the size of the hotel and its complexity of design, a property can take more than two years to develop.

But calculations show that Marriott will add more than 175,000 rooms in a matter of a few years.

Melby said about 45% of these rooms will belong to the full-service categories, such as Marriott, Renaissance, and Ritz-Carlton. These same brands will represent about a quarter of all new hotels.

The five limited-service brands -- Fairfield Inn, Courtyard, TownePlace Suites, SpringHill Suites and Residence Inn -- will comprise the remainder of new properties, and Melby said Courtyard and the extended-stay brands (Residence Inn and TownePlace Suites) would receive some emphasis.

For observers wondering where the panoply of Marriott brands will end, relief seems to be in sight.

"I think at this point, we've addressed most of the segments that would come to peoples' minds, save the hard budget category," said Melby.

Marriott has made its aversion to the budget segment well known. As the company's portfolio is already heavily focused in the U.S., Melby indicated that international growth would be a priority. The publicly stated goal is to have hotels in 70 countries in the next five years.

Melby said Marriott's international distribution will be determined by the brand. In full-service brands, such as the company's Marriott and Renaissance divisions, about half of the growth will be overseas.

Melby said Marriott expected to be "very successful in Europe, the Middle East and Africa."

He added that the firm was not worried about the ripple effect of overseas economic earthquakes.

"One of the advantages of being a global company is that it's rare that all areas of the world would all be affected in a downward manner," said Melby. "If we were affected in one area, we could make up for it in another."

While the international markets will see a good chunk of the firm's full-service growth, about 90% of the limited-service action, in such brands as Courtyard and Fairfield Inn, will take place in the U.S.

Marriott will continue to concentrate its management efforts on full-service properties.

In limited-service hotels, it's more likely that the property will be a franchise, owned and managed by another company. Melby said about 80% of limited-service hotel growth will be through franchising.

"We tend to be very rigorous in our review of both the economics as well as market feasibility in each and all of our projects," said Melby. "The last thing we want to do is place the wrong product in the wrong market."

One of Marriott's biggest efforts, relative to the existing portfolio, is the development of Ritz-Carlton.

Melby said the company plans to open nearly 40 Ritz-Carlton hotels by the end of 2003, and more than 25 of those projects are already under way. All told, the additions will nearly double the size of Ritz-Carlton.

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