Marriott Eyes MENA

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The word Holiday makes you imagine many things. An exotic location, golden sunny beaches, rafting, snow capped mountains, skiing and the list goes on. However the next image which pops in your mind and literally burst your bubble is the hotel, your place of stay during the holiday.

You imagine an ambience that exudes the aroma of comfort, luxury, opulence, warmth, and tranquility. A semblance of peace and quiet that you can soak into and feel rested at the end of a hectic day. A home away from home, Marriott Hotels.

Marriott Hotels and Resorts, a franchise of Marriott International Inc, is a brand of full-service, five-star luxury hotels and resorts. It is one of the most trusted name in the hospitality sector; renowned for its spirit to serve, its consistent quality and genuine care.

The beginning

It all began in the year 1927 in Washington D.C. by a man named John Willard Marriott, an American entrepreneur and business. Its illustrious heritage can be traced back to a chain of family restaurants in 1932 and the first motel emerged in 1057 in Virginia.

The company became Marriott Inc., in 1967. At present, Marriott International has about 3,150 luxury lodging properties spread across the United States and 68 other countries and territories.
Operations

Marriotts operations are grouped into the following five business segments:

Full-Service lodging – 65%. The Marriott brands that come under this segments are : Marriott Hotels & Resorts, JW Marriott Hotels & Resorts, Renaissance Hotels, Ritz-Carlton, BULGARI Hotels & Resorts, Autograph Collection Hotels & Resorts, Edition Hotels & Resorts, and Marriott

Conference Centres.
Select-Service lodging – 11%. The hotels that come under this segment are : Courtyard by Marriott, Fairfield Inn by Marriott, and SpringHill Suites by Marriott.

Extended Stay Lodging – 5%. The hotels that are exclusively meant for long-term stay are : Marriott ExecuStay, Residence Inn by Marriott, TownePlace Suites by Marriott, and Marriott Executive Apartments.

Timeshare – 15%. This comprises of the Marriott Vacation Club International (MVCI), Marriott Grand Residence Club, the Residences at the Ritz-Carlton and the Ritz-Carlton Destination Club.

Synthetic fuel – 4%. Primarily a tax shelter.

Global presence

Today, Marriott group of hotels can be found on all continents other than Antarctica. With more than a total number of 3150 hotels, the staff of the company consists of more than 200 thousand people, and an annual profit that has crossed the mark of 10 billion dollars.

The company has had its fair share of ups and downs in the recent history.
In 2001, the company experienced numerous problems. Hoteliers were not satisfied with the company actions in the field of providing franchising services and demanded the revision of the contract.

The shares of the hotel giant became cheaper by one-third and that created a critical situation for Marriott.

However, since 2003, the company has demonstrated a steady growth. Shares of Marriott have doubled in price over the last five years.
Marriott decided to stay ahead in the game and had to change its strategy.
Thereby in 2006, Marriott banned smoking in all of it hotels in the U.S. and Canada.

Marriott is also known for its programs intended for the reduction of harmful impacts on the environment for which it was awarded the title of Green Marriott.

Marriott earned $11.69 billion in revenues in 2010, as compared to $10.91 billion in 2009.

Asia growth

Marriott is not a market leader in Asia, thereby it decided in 2010 that it would actively pursue the Asian market. Marriott now has about 45,000 rooms in Asia, less than 10% of a total – that is around 6,00,000 globally.

On November 11, 2010, Marriott Inc announced plans to add over 600 hotel properties by 2015, the bulk of which will be in the emerging markets.

“India is a growing economy and we expect demand to grow,” Sorenson told reporters in Mumbai. “It is the second-largest hotel development pipeline in Asia, and is expected to double the number of branded hotel rooms over the next three years to about 1,20,000 rooms.”

It also has major expansion plans in other countries such as China and Southeast Asia. In China, the hotel group will add 27 new hotels by the end of 2014 to make a total of 84 in China, Simon Cooper, Marriott’s Asia Pacific President and Managing Director, said during his recent visit to Beijing.

Over the next 10 years, we’ll see that Asia will become an increasingly larger part of our company. And by the way, that’s just not about the hotels we have in Asia, but it’s about the business we do with Asian customers,” Arne Sorenson, Marriott’s President, told Reuters in an interview.

Marriott believes that it needs to modify its image and services to cater to more distinguished taste of Asia.

MENA Growth

Marriott International will roll out six new properties across the MENA region in the next three years.

And Marriott has future plans to bring its moderate-tier brand, Fairfield Inn, to the Middle East.

Looking ahead, our challenges in some markets are going to be development of people because we are opening so many managed hotels, said Ed Fuller, president and managing director of International Lodging for Marriott International.

In other areas, it will be to continue to focus on expansion and growth. Africa is a new market – one that we still need to learn and get established in and it will continue to be a priority this year.

Marriott currently has 43 hotels under development or construction in the next five years, which will swell its overall MENA portfolio to 74 properties. “We may even get close to 100,” he said.

They include the 78-room Residence Inn by Marriott Juffair in Bahrain – marking the first Residence Inn by Marriott regionally – and 495-room Ritz-Carlton Riyadh, both due to open this year.

Other developments include a double move on Algiers, with a 247-room Courtyard by Marriott and 147-room Residence Inn due to open by 2014.

The region will also see a 335-room Courtyard by Marriott Cairo Mirage City (opening 2012) and Ritz-Carlton Rabat (2013).

The first half of the 1,614-room property will open in mid-to-late 2012, with the remainder opening a year later. With its two ballrooms, 22 break-out meeting rooms and 4,015sqm of total event space, the hotel will be primarily targeting convention business.

UAE

Marriott made the announcement at the base of the JW Marriott Marquis Dubai – set to be the largest Marriott outside North America when it opens next year.

President & Managing Director Ed Fuller said despite political and economic uncertainties, the development opportunities remain strong. The expansion of the companys development office in Dubai helped grow Marriotts focus on Africa as well as the Middle East.

The dynamic nature of tourism in the Middle East and the strong emergence of Africa as a viable destination for business and leisure travel are evident. We expect both to play an important role in our strategies in the long-term future, he remarked.

Tourism

External tourism is the number one provider for hotel profitability.
According to Dubai Real Estate Market Overview, the occupancy levels during the first two months of 2010 averaged 80%, which is around 8.6% higher than the occupancy rate during the same period in 2009. The DTCM (Dubai Department of Trade and Commerce Marketing)s first semester 2010 reported a steady growth of 9% increase in number of guests, totaling 6% increase in hotel revenues in Dubai – Dh6.9 billion.

In parallel, ADTA (Abu Dhabi Tourism Authority) announced an increase of 16% in the number of hotel guests in the first half of the year.

Travel

To add sweetness in staying at Marriott, the travelers are offered 20% discount when the stay is booked using the Visa credit card,

The summer promotion, which extends to Europe and Asia Pacific, will be valid for stays between June 17-September 4, although bookings must be made at least a week in advance

Why MENA?

Many experts say that Marriott is investing heavily into the MENA region, which according to some is not advisable especially as most of the expansion has been though debt finance.

This region has become a very volatile region; one can never say what will happen next a hotel analyst based in Dubai told AG. Other emerging markets like India and China are safer bets, he told.

In the past one year alone we have closed out hotel in Bahrain and Libya. This has caused us a lot of financial difficulties, told a manager from a leading hotel group based in Dubai.

Marriott is not a company which works on just impulse, it is a company which has clear vision and strategy. Furthermore it definitely would have done its due diligence of the region.

Beat the competition

There are many other brands which are present in the region whilst Marriot does not have a considerable presence.

Marriot believes that the U.S. and European markets are saturated and this is a region literally untapped n Hospitality analyst from Waltz and Young, Michigan told AG. The thing the west still is not sure about the region of Africa though it knows the Middle East somewhat, thereby many other hospitality brands are hesitant to enter the region.
Marriott wants to mark its position before the likes of Holiday Inn comes into the region.

Conference and Events

Marriott also sees the opportunity that the region has to generate business tourism, the UAE in particular.

With a big expat population and international companies being based in UAE it has become a hub for international events and conferences.
(AG has already done an article on this potential segment)

Business Tourism

Many business passengers prefer to have a layover in Dubai for a couple of days, not only for shopping but for simple relaxation.

The Marhaba Service in Dubai told AG that they see an increase in short stays by business passengers. These passengers book through us at the last minute and we arrange all the necessary documentation for them and they enjoy a minimum of three days stay in Dubai before they head home.

Contribution to the Economy

The expansion plans across India will create more than 8000 jobs in the country.

Billy Kelleher TD, Minister for Labour Affairs at the Department of Enterprise, Trade and Employment, announced that Marriott International Inc, is to establish its second operation in Cork, supported by Government through IDA Ireland, creating 220 new high quality jobs over five years.

Marriott’s existing Cork City operation – MVCI (Marriott Vacation Club International) Services Limited – was established in 2002 as a European Regional Headquarters, supported by IDA Ireland. It currently employs 160 of the 250 people planned for recruitment over five years.

After all

With a vision to be the worlds leading provider of hospitality services, the Marriot hotel offers the best and most diverse lodging portfolio in the hospitality industry and promises their customers the utmost care and comfort.

Marriott has valued resourcefulness for decades. But resourcefulness is not an end in itself. Its a tool one uses in the ongoing construction of value, a project thats never finished. This is their motto, by which they strive to succeed in their endeavor.

Marriotts long-standing reputation for quality products and service gives the customers the confidence to explore their world. Whether attending a business meeting in Hong Kong or vacationing in Miami, travelers enjoy the ambience and memorable experiences other countries and cultures have to offer. They know that almost anywhere they go, Marriott brands will be there to provide them with consistent, reliable and comfortable accommodations and services.

From relaxing, enjoyable, affordable rooms not far from home, to opulent, luxurious upscale accommodations in major gateway cities, to romantic resort getaways in exotic locations around the worldMarriott is there.

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