MARRIOTT International will increase its rooms supply in the Middle East by more than 250 percent over the next five years primarily with its high-end, luxury brands, and is actively looking for local partners.
In an interview with KEITH J FERNANDEZ, Ed Fuller, president and managing director of international lodging for Marriott, said the company plans to increase its presence in existing markets while looking for new opportunities regionally. Fuller expects 25 per cent of the company’s future growth will come from outside the US and that its worldwide lodging portfolio is growing by 25,000-30,000 rooms, or 150 hotels annually. Excerpts:
22 hotels in the region and 6557 rooms, which are set to increase 250 per cent increase. That’s quite a bit?
Quite frankly we are very excited about the potential. We’ve been in the region for more than 25 years but this is the most exciting time ever. We’ve a lot of activity going on and we have never had a pipeline like we have now. The Middle East would be in the number two position for growth. Much of this has to do with the opportunities opening up around the region, and the fact that we’ve seen double digit increases in this market in our performance over the last couple of years. In fact, in terms of performance, the Middle East was the highest increase, although we had double digit increases worldwide in all markets but Europe, but that was still good.
The Middle East really has had two phenomenal operating years and we expect to see that continue. Dubai obviously has a key role, but we are also here for the other new, developing markets as well as looking at markets like Egypt.
How many properties are you looking at? Do you have a target?
In the luxury market, it’s a significant number. I cannot give you a specific number, but overall it is a double digit growth in addition to what’s been announced. Beyond that we continue with our Court-yard expansion and are seeing very strong results from the Marriott Executive Apartments. With just one percent of the world’s lodging supply outside the US, we clearly have a lot of room to grow.
That is sort of the segment the region is growing in now – mid-market, budget. What’s the scope for the Marriott there? Any plans to bring in your lower-tier US brands?
We don’t have a budget product here, what we have is a moderated product, that is Courtyard. And our regional model is the Green Community Dubai, which is more upmarket than the typical model in the USA, no surprise. We’ve addjusted the Courtyard for every market it is in, Asia, the Middle East, Europe, and there’s great potential there. But there is still great potential for a luxury product, so we are going forward with the entire portfolio. Outside the US, the only brand missing here is Bulgari, which is a luxury product.
In the US we do have lower-tier brands, but are not taking them to any international market now.
Can we expect a Bulgari in Dubai?
We have opened Milan and we are about to open in Bali and there is a strong pipeline that we have not announced. But words are cheap.
What percentage growth do you expect to see this year?
Well, our system RevPAR was up 10.3 per cent last year and we would expect similar results this year too.
What about reaching Gen-Xers? They are travelling as well.
There was a recent article out saying, ‘Watch out the baby boomers are bigger than Life.’ We don’t want to discount them. But we’re very conscious of the Gen-Xers, and our Renaissance brand really is designed for them. It’s more out there, it’s got that boutique-ish feel. We’re taking the product and making it more contemporary to reflect changing moods and interests. The Shanghai Renaissance, for instance, you have to mow the coffee tables in the morning, because there’s grass in the middle of the coffee table. The clients are really out there, they’re fun and whimsical, not quite the consistency you’d expect in some of the lobbies here in Dubai.
One company running 19 brands, is that difficult?
It would be maybe, if we hadn’t been doing it for so long. We’ve had Courtyard for over 25 years, so we were a multi-brand company before most of the others, so we’re a lot more used to it. We’ve a very creative brand team that keeps us on top of our customer needs, with a huge amount of market research. We globalise that research, and with those resources are able to execute, I think, better than most.
But then you don’t want to mix up the brands?
No, an example for that is, we just spent $190 million on redoing our bedding worldwide. Each brand has its own unique bedding package. Ritz-Carlton has something like a 500-thread count sheet, Marriott is 300, Courtyard is a 180-count sheet. And there’s all sorts of design in the sheets that is unique and so on. When we look at anything, we make it unique to that brand.
What new innovations can we expect?
Without giving away too much to the competition, because this is really becoming a situation now where everybody is competing to try and find the next niche, Marriott candidly is best at execution. A lot of people make announcements, we just convert. By the end of this summer, every bed in 2800 hotels would have converted to the new bedding. Our next move is really going to be in the technology area. So, we’ve done research and actually followed guests in the hotel room to understand how they use the hotel room. It deals with menus, with the technology in the room itself and we are in the process right now. It’s a little early to announce it, but you’ll be hearing some specifics shortly.
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