At Marriott, a Massive Makeover

CEO Bill Marriott discusses plans to refurbish well over 600,000 rooms. It's a big move, he admits, but the chain's upstart rivals make it essential

Marriott (MAR ) CEO J.W. "Bill" Marriott Jr., 73, is updating his brand to appeal to younger generations. A stickler for service, the chain is known for its reliable quality, but it lacks the cachet of the chic boutique hotels that are popping up across the U.S.

Now Marriott is upgrading the bedding in all 628,000 rooms worldwide by yearend and embarking on other initiatives to catch up to current trends (see BW, 9/26/05, "Marriott Hip? Well, It's Trying").

On Sept. 7, CEO Marriott chatted with BusinessWeek Correspondent Catherine Yang about the challenges of renovating his brand. Edited excerpts of their conversation follow:

What was the catalyst for Marriott's brand reinvention?

A couple of years ago, I was on trip out West to an old motel converted into a stylish hotel -- called the James Hotel [in Scottsdale, Ariz.]. It was essentially still an old motel, but it had white duvets, half a dozen pillows, flat screen TVs -- and was running at a very high room rate.

We had a far superior product, but it's older, not as trendy, or up to speed. I said let's get ourselves a whole new room.

If you don't upgrade the brand now, does Marriott risk becoming a has-been in the industry?

That's true of any company in any industry that does not embrace change. My father said 50 years ago that success is never final. He stole that from Churchill. We continue to change. We always have. At the same time, we care for our guests and make them feel welcome. That's something that's hard for our competitors to duplicate.

It's easy to do the physical things -- the bedding, carpets, drapes. Anyone can do that, but it's what goes with it -- the whole package. That is driven as much by the quality of service as the physical side.

What is the Marriott brand image today, and where do you want to take it in five to 10 years?

Our brand image is consistency. When you come to a Marriott, you know you're going to get friendly and efficient service and a room where you can get your work done. We realize we're not appealing to Generation X, but we have strong loyalty from the baby boomers. We really felt we needed to change and move into the 21st century.

In any brand reinvention at a big, established company, there's tension between sticking with what you're good at and embracing something new that may not be in your DNA. Would it be a mistake for Marriott to stray too far from its roots to compete on the basis of flash? You've got to have a balance. You can't go completely over the edge. We don't want stainless-steel furniture.

But younger people redo their homes more often. We know our 10- to 15-year cycle of furniture upgrades may have to change. We may not be able to go beyond a 10-year cycle.

Some say Marriott has been slow to change because of arrogance. Is that the case?

Arrogance is a thing that drives companies to destruction. We sometimes come across as arrogant. That's one of the things that disturbs me the most about the way we present ourselves. It's something I won't tolerate. I'm very, very concerned about it.

We can't change as fast as our competitors because we don't own any of our hotels. [Marriott Intl. owns seven of its 2,700 hotels worldwide and manages or franchises the rest.] When we want to make a change like this, we've got to sell it to some thousand hotel owners. That's not easy. The Westin (HOT ) owned two-thirds of their hotels when they started the Heavenly Bed [in 1999]. They were able to punch a button and roll it out.

Do you want to start a line of boutique hotels?

We're continuing to look at it, but we're not yet ready to jump. We know that they'll be successful in major metropolitan areas. There are 20 to 30 cities in the U.S. that could take a boutique we would manage. I think we could do great job of managing a boutique.

We need a partner to do the restaurants because they're very unique. You need a restaurant guy, not a hotel-restaurant guy. The restaurant piece is complexity that we need to work our way through. You can't have the Marriott name on it. We wouldn't even attempt to do that. Next year we'll make the decision.

Are you a fan of technology? What personal technology do you use?

I have a cell phone, but no BlackBerry. I'm still thinking about it. I got an iPod from David, my youngest. He picked up all my Big Band CDs -- Tommy Dorsey, Glenn Miller -- and stuck them on the iPod. I take my iPod and hook up Glenn Miller, and I'm just living high.

I hear you use a floral bedspread at home. Why not a duvet?

My wife won't iron them. She said: "You iron them."

Edited by Patricia O'Connell

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