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Thu 22 Jul 2010 04:00 AM

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Leading the way with luxury

Marriott International Global Full Service Brands executive vice-president Donald J. Semmler and JW Marriott Brand and Marriott Hotels and Resorts Brand senior director Mitzi Gaskins discuss new brands, the continuing demand for luxury and why hotels should reward loyalty.

Leading the way with luxury
Leading the way with luxury

Marriott International Global Full Service Brands executive vice-president Donald J. Semmler and JW Marriott Brand and Marriott Hotels and Resorts Brand senior director Mitzi Gaskins discuss new brands, the continuing demand for luxury and why hotels should reward loyalty.

Recognised by Fortune as one of the best companies to work for, and reporting sales from continuing operations of nearly US $11 billion last year, Marriott International has expanded in 2010 with the launch of two new luxury brands.

Hotelier Middle East met with two of the company's brand leaders, Marriott International Global Full Service Brands executive vice-president Donald J. Semmler and JW Marriott Brand and Marriott Hotels and Resorts Brand senior director Mitzi Gaskins, on their recent visit to Dubai to find out why Marriott remains optimistic that luxury will lead the way out of the crisis.

New launches

Adding to its already sizable portfolio of brands including Ritz-Carlton, JW Marriott Hotels and Resorts and Renaissance Hotels, Marriott International recently announced the arrival of two more concepts: Edition and The Autograph Collection.

Edition, which will officially launch with the opening of the first hotel in Waikiki in September 2010, is set to grow slowly, with a second hotel planned to open this year in Istanbul and five signed. It is a high-end experiential lifestyle brand, the concept of which was evolved by employing the highest talent in every experiential element of the hotel, from landscape architects to lighting specialists, to create a hotel where guests feel the difference.

"It is the only hotel that is conceived with that kind of resource. And it is all built around how is it going to make you feel, how will it affect you; it will be unlike anything else in the market place," Semmler asserts.

The Autograph Collection, which launched earlier in the year, will grow more quickly. Eight hotels are open already, 14 hotels are committed and signed in the US, and Marriott is aiming to have 25 by the end of the year. A different concept to the existing brands operated by the company, The Autograph Collection comprises independent hotels which retain their own brand name and personality but are operated by Marriott International.

"We have always invested in sales, revenue management, e-commerce, the loyalty programmes that we have, and we realised that globally the platform that we have to generate sales is the largest in the world, the only one that comes close is Hilton and they are smaller," Semmler says. "On a global basis, if you want system power - Marriott is the largest. We are a growth company so we always look for ways to grow."

And the concept seems to be popular, with plans to expand the brand already being considered.

"We'll be moving The Autograph Collection globally over 2011 so we are excited to have some play in Europe because the European hoteliers never sell - they want to run it their way and here is an opportunity for them to do that and make more money," adds Semmler.

Luxury

The new brands, both of which are luxury offerings, speak volumes about the continuing demand for luxury in the hospitality industry, despite the global financial crisis.

"When we went down in the downturn, the luxury brands Ritz-Carlton and Four Seasons were affected disproportionately, they went down even further. But now we are pleased to say that the luxury tiers are leading the way out," maintains Semmler.

"We know that luxury will never go out of style because RevPAR is moving up faster in luxury offerings than the other brands, and the luxury survey we ran recently shows that people really respect great service and fantastic products and will pay for that. People now may spend more time researching their stay and exactly what will happen, but it looks to us like luxury is a fantastic tier moving forward.

"It is being led by the Middle East and Asia - so in terms of luxury today, when you talk about growth, you immediately go to Asia and the Middle East," he adds.

Of the company's luxury offerings, JW Marriott is growing more quickly than the others.
"It is the fastest growing luxury brand for a couple of reasons; one is that it's the perfect blend of builder cost from an investor perspective. It has a higher build cost than Marriott and lower than Ritz-Carlton, but the rate it can get is disproportionately high because the service level is great, food and beverage levels are great, craftsmanship is great. It is a different kind of luxury customer - someone who wants everything right but doesn't need a lot of opulence on top of it,' reveals Semmler.

Although the demand for luxury hotels remains, Gaskins observes that guests' perceptions of what luxury hotels should offer has changed.

She points to the power of knowing the guest as being a real sign of a luxury hotel.

"We have done a lot of research into understanding the passion points of our guests, and we really know them to be very interested in culinary culture and wellness," she says. "So everything that we are doing is designed to enhance the guests' experience by playing up those passion points. Whether you are on a business trip or leisure, there are offerings for you in the hotel. So everything is taken care of, it's seamless, it is distraction free, but in the end what we want to do is to give you the time and freedom to concentrate on whatever is most important to you.

"I think JW is perfectly positioned for this because we are known for being approachable with this casual elegance so as you go away from formality and tradition with this new luxury, we are in a great position," adds Gaskins.

Finance

Reassessing business in the downturn can only be beneficial for guests, says Semmler.

"Looking at the business means that we will end up with talented staff members and the ability to customise guests' experiences," he says. "The downturn has been beneficial in terms of improving customer service. Innovation is born out of necessity, and economic downturns force you to sharpen your saw and look again at everything you do and how you do it and how you take care of your customers.

"For us, coming out of a downturn is exciting because we have been looking at how we might continue to grow in different ways. So the analogy that one of the economic think tanks in the US came out with is that it's like an oval race track, so when times are good everyone is flying down really fast, when the economic downturn comes you've got to go into the corner, and at the corner there is all kinds of bad stuff happening, elbows are flying and everybody's trying to get an advantage but it's what you do in the turn [that's important]. If you don't invest in your brands and in new ways to grow, when you come out there are more leadership changes than at any other time. So it's the courage you have when you're in the downturn to continue to look for optimism that catapults you out of the turn. We came out with Autograph and Edition and JW and we've got new programming for Ritz-Carlton so we feel pretty good about it," says Semmler.

Brand loyalty

And with customer loyalty remaining incredibly important to the hospitality industry, particularly so during the financial crisis, it is no surprise that the company is looking for innovative ways to retain its existing customers.

"The frequency programme we have - we were the first ones to do that in this industry," says Semmler. "We have 32 million members in the loyalty scheme and every night 50% of the room nights occupied across the globe come from that membership so those people have been extraordinarily consistent, even through the downturn."

The rewards scheme allows customers to collect ‘points' with every visit to a Marriott International property. Customers can then choose to spend their points across the brand offerings, use them as gifts or even spend them on products from the golf shop. It is a way, says Gaskins, of thanking customers for their repeated business.

"They [customers] have become more loyal in times like this than even in good times," she says.

"It's also a way for us to look after our most loyal guests - so we have our elite members who get certain benefits from their hotel stay," continues Gaskins. "Each time they stay they get access to the executive lounge in the JW Marriott brand; they also get amenities when they arrive, so they really are treated like our most valuable guests because that's  exactly what they are to us."

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