Bill Marriott and Ian Schrager make odd bedfellows in hotel world

As one of the biggest hotel groups goes boutique, can Bill Marriott make a deal with Ian Schrager work?

At 76 years old, Bill Marriott could never be mistaken for hip. The chairman and chief executive of one of the world's largest hotel companies is the model of traditional conservative American values. His idea of cool is probably a long glass of iced lemonade on a warm day.

The hotels in the 3,000 properties-strong business that bears his name exude an air of reliable, solid, perhaps slightly fusty, conformity. Even its top brand, the rapidly expanding luxury Ritz Carlton chain, consciously recreates an atmosphere of teak-furnished, chintz-upholstered, old-fashioned elegance.

Yet in a testament to the spirit of change that animates successful business leaders, Mr Marriott recently acquired a new and quite unusual best friend. His latest - improbable - bedfellow is Ian Schrager, the enfant terrible of 1970s New York, known for style-led boutique hotels such as the Sanderson in London and Morgans in Manhattan.

The two men signed a deal last year to start a new brand of high-end, super-trendy, luxury hotels called, in a very postmodern, unMarriott sort of way, Edition. The first is set to open its doors in Los Angeles in 2010, closely followed by properties in Paris and South Beach, Miami, and at least ten more after that.

It has been described as one of the strangest pairings in capitalism: the upstanding Mormon who started life as heir to the rootbeer stand in Washington DC owned by his father, and patiently built one of the world's best-known brands; and the fast-living New York party king, the ageing monarch of style and creator of the modern “boutique” hotel, who once spent time in a federal prison for tax evasion.

Mr Marriott seems faintly bemused by the cultural frontier he has crossed. “Earlier this year we announced the new Edition name in LA and we had a big party. It was so noisy you couldn't hear yourself speak. I was asked to say a few words and I said this was the craziest party I've been to since high school,” he told me.

It was, Mr Marriott happily acknowledged, the success of Starwood's W Hotels chain - one of the few real marches that the rival hotel group has stolen on him in the past decade - that inspired the partnership.

Critics have wondered whether such an unusual pairing really can work. It is hard to imagine the two men having anything in common other than the fact that they both spend a lot of time in hotels - more than 300 nights a year, in Mr Marriott's case - but the older man insists that the fit is a good one.

“Ian [Schrager] is responsible for design, for the concept, the creativity of it and we'll be managing and marketing the hotels. We'll use his PR ability and his ability to create products that drive demand,” he said.

I asked Mr Marriott if his staff had noticed any signs that he had become hipper since he started his new partnership. “I'm still the same old conservative guy - still wear a tie. Ian will not wear a tie - I don't think he owns a necktie.”

Sure enough, when we met, Mr Marriott was in grey business suit and tie - even in the casual surroundings and circumstances of a 76th birthday celebration and family reunion at Marriott's Camelback Inn in Scottsdale, Arizona. Later, when another new Marriott partner, the superchef Laurent Tourondel of the BLT French-American steakhouse chain that is sweeping America, came by to cut a special birthday cake, Mr Marriott was still soberly attired in the Arizona heat.

The American recession is on the front of every business leader's mind and for Mr Marriott, the business cycle is a familiar, if painful, acquaintance. “There've been six [recessions] since 1960 and I've been in every one of them,” he noted with a smile. Yet even he is a little concerned about the unpredictability of the latest downturn.

“The thing that's different about this one is the tremendous amount of uncertainty,” he said. “Nobody really knows how much more of a hit the sub-prime situation is going to cause financial institutions.”

The hotel business is highly susceptible to the cycle. Mr Marriott says that occupancy levels in the hotel industry in the United States are likely to record a slight decline this year, for the first time since after the terrorist attacks of 2001 - a little under 1percent. Revenues continue to grow, although at a slower pace: revenue per available room is expected to be up by 3 per cent this year, down from 6 per cent and 7 per cent increases in the past two years.

For Marriott, a third of whose revenues now come from outside the US, the rest of the world is a comfortable cushion against the weakness in America. Half the new rooms that Marriott is opening are outside the US, with continuing growth in Asia, Latin America and the Middle East.

Europe has been less impressive, but London continues to churn out high revenues. Mr Marriott notes the city's status as an international centre and marvels at the influx of long and short-term guests - from Russia, in particular, wryly noting the change in his 50 years in the hotel business: “We used to think they were going to blow up the world and now they're going to buy up the world.”

Marriott's global role is not something that many would have predicted when the company was founded by Mr Marriott's father in 1927. After the famous rootbeer stand and its offshoots, Marriott Sr moved into the lodging business, but it was his son who built it into an empire. Even then, Mr Marriott displayed a canny flexibility that proved critical to the company's growth.

The teetotal Mormon family faced an early ethical dilemma as they expanded. Their first few hotels had been in dry states, but with the opportunity to open in Philadelphia came a challenge: “We were either going to stay in the hotel business and sell liquor or not sell liquor and get out of the hotel business. We couldn't put a sign out front saying we were members of the LDS [Latter Day Saints, the Mormon Church] and wouldn't sell drink - we'd have got all the Mormons staying with us, but that's all.” Today, ethical challenges can also be business opportunities. Like many corporate leaders, Mr Marriott has come under pressure to deal with the company's large carbon footprint. In addition to the usual energy-saving measures that are becoming standard in hotels - less frequent laundry, efficient-flushing lavatories and longer-lasting lightbulbs, the company recently began to reserve parking spaces at corporate HQ for hybrid cars. Last week Marriott signed a deal with the Brazilian state of Amazonas to help to protect 1.4million acres of endangered rainforest.

Critics are sceptical about what they see as PR initiatives even as the company continues to pursue growth, but Mr Marriott insists that he is a firm believer in the challenge of global warming - “We don't want ten feet of water in New York City running down Broadway.”

Mr Marriott still likes to get a direct feel for what Marriott guests think about their hotel experience. These days, however, when he stays at his hotels, the management always knows in advance that he is coming. As a result, he admits, he feels a little like the Queen, who is said to have gone through life thinking that the world smells of fresh paint.

Mr Marriott has started his own blog (blogs.marriott.com) as a way to keep in touch with his customers. “To a lot of people in the world, corporations are faceless and don't have any soul or spirit behind them,” he said.

“I think people like to know what I do; that as CEO of this company I still like to go to the movies with my wife on Saturday afternoons. That I put my pants on one leg at a time like everyone else.” Another thing, we can only presume, that he has in common with Ian Schrager.

The leader questioned

If you could change one thing in the financial and commercial environment, what would it be?
A lack of focus on employees and customers and too much focus on short-term results

Who is or was your mentor?
My Dad

Does money motivate you?
Success and growth motivate me - money is an offshoot of that, but not the primary motivation

What is the most important event of your working life?
June 16, 1956 - the day I came to work for our company

What gadget must you have?
A cellphone

What does leadership mean to you?
It means embracing a lot of different opinions and being a great listener

How do you relax?
With family - kids, grandkids; dining out; going to the movies

CV
Born: March 25, 1932, Washington
Educated: University of Utah
Career: US Navy 1954-56; Marriott Corporation 1956-present (president 1964; chief executive 1972; chairman 1985)
Family: Married to Donna Garff, four children, fourteen grandchildren

Source:
The Times