Why Marriott Is Seeking to Run Inter-Continental

Marriott Corp. would score something of a coup should it be able to take over management of the troubled Hotel Inter-Continental in San Diego, according to hotel industry observers.

With that management contract in hand when San Diego’s convention center opens in 1989, Bethesda, Md.-based Marriott would become the only hotel chain with major hotels at or near convention centers in San Diego, Anaheim and San Francisco.

Marriott, which operates a 1,043-room hotel across the street from the Anaheim Convention Center, will open a 1,600-room hotel across the street from San Francisco’s Moscone Center in 1989.

The chain last month confirmed that it is negotiating to take over management of the 681-room Hotel Inter-Continental. The company also hopes to manage an adjacent, 683-room tower that will open in December. The combined 1,364 rooms will make the hotel the largest in San Diego.

‘Part of Marketing Game’

“Being near convention centers is part of our marketing game plan,” said Warren Ruello, Costa Mesa-based regional director of sales and marketing for Marriott.

The Inter-Continental’s twin towers, which are adjacent to the convention center that is scheduled to be completed in May, 1989, “would give (Marriott) a new area to attract convention business,” according to one observer.

Marriott expects that its trio of West Coast convention-oriented hotels would catch the eyes of meeting planners who would rather deal with one hotel chain than three separate companies.

For example, Marriott expects that its ability to offer convention-oriented hotels in San Francisco, San Diego and Anaheim would attract meeting planners who regularly alternate annual meetings between the East and West coasts--but who don’t want to return to the same city each year.

Also, Marriott hopes to package “multiyear deals” to groups interested in holding their meetings on the West Coast.

Marriott’s move to manage the convention center hotels is “good news for people like me,” said Albert Sears Jr., director of member services for the National Fire Protection Assn., who plans several meetings each year for the Quincy, Mass.-based group.

Sees Good Package Deals

Sears, who has booked the Town & Country Convention Center for smaller meetings, said he welcomes news of Marriott’s possible management of the hotels at the convention center.

“Number 1, when I deal with one hotel chain, they know our group, and it saves us time when it comes to familiarizing them with our meeting,” Sears said. “And, depending on the time of year, I’d bet we’ll be able to work some really good (package) deals” with Marriott.

Meeting planners prefer to deal with hotels that are within walking distance of major convention facilities because transportation costs soar when attendees are scattered around a city.

Marriott’s move to acquire a management contract at an existing hotel instead of building its own property reflects a growing trend in the hotel industry.

New hotel construction has slowed, largely because of last year’s tax law changes and the fact that most of the better locations have been taken, according to Bruce Goodwin, a San Diego-based analyst with the accounting firm of Laventhol & Horwath.

Goodwin predicted that hotel chains increasingly will skirt that new construction slowdown by buying existing properties or forging marketing affiliations that could bolster occupancy rates.

The change in operators at the Hotel Inter-Continental first must be approved by the hotel’s primary lender, Los Angeles-based Home Savings of America, and by the San Diego Unified Port District, which owns the hotel site.

Pacific Landmark Hotel Ltd., a partnership that developed the hotel, announced last month that Marriott had signed a preliminary agreement to manage the property. Pacific Landmark would retain ownership of the hotel.