Smaller Projects Part of $2-Billion Building Plan : Marriott Alters Its Strategy on Hotels
Marriott Corp., the well-known hotel and restaurant chain, said Thursday that it plans to spend more than $2 billion in the next few years to build up to 80 new hotels around the country.
The building program represents a marked departure for Marriott’s hotel operations, which have been largely confined to full-service facilities in large urban areas. Marriott currently operates 147 full-service hotels and resorts around the world, including 11 in California.
Now, for the first time, Marriott says it’s going to start building scaled-down, full-service hotels in smaller cities, as well as luxury-suite hotels that offer guests kitchen facilities and separate living rooms and bedrooms, with phones and televisions in each room.
Both types of facilities are considered the waves of the future in the hotel industry. Just two weeks ago, for example, Hyatt Hotels announced a $750-million program to build small hotels in suburban areas and smaller cities.
Marriott wants to broaden the base of its lodging operations because “you can only build so many 400- to 500-room hotels in any one area,” says Mitch Roberts, a hotel consultant for Laventhol & Horwath in Los Angeles. (The new hotels will have between 200 and 300 rooms, the company says.)
Marriott officials agree that the diversification represents the changing realities in the hotel industry.
New Strategies
“We see fewer opportunities in building traditional hotels--the big ones in the larger metropolitan areas,” a company spokesman said. “We’re looking to continue our growth, and we’ve adopted a few strategies to do that.”
Its other strategies include building medium-priced courtyard-style hotels--one of the company’s fastest-growing operations--and the expansion of its extensive restaurant operations, which include more than 850 Bob’s Big Boy restaurants and nearly 550 Roy Rogers outlets. Marriott recently said that it has agreed to buy a string of Howard Johnson’s restaurants that will be be converted into Big Boy outlets.
The first of the smaller, full-service hotels are expected to open in two years in Georgia, New Jersey and North Carolina, while ground was broken Thursday on the first of the luxury-suite hotels in suburban Atlanta.
About half of the 80 new facilities will be the smaller full-service hotels, while the others will be the luxury-suite variety. The company said it expects all the new hotels to be open by the early 1990s.
Company officials declined to say how many of the new inns will be located in California, but the spokesman said the region “is a high priority for both projects. We can’t be specific on the numbers because we don’t have them yet.”
Marriott’s profits have been increasing every year since 1975, when it earned $22 million. Last year, the company made $135 million on revenue of $3.53 billion.
