Marriott tailors approach in China

03 May 2011

BEIJING: Marriott International, the hotel group, is taking a nuanced approach in China, carefully prioritising which brands and locations to emphasise across the fast-growing market.

Currently, the organisation runs 130 sites in Asia, mostly under the Marriott, Ritz-Carlton and Renaissance banners.

A further 70 are in development, and 110 at an earlier stage still, with around half of the company's proposed new properties to be based in China, and the rest divided between India and south-east Asia.

Such is the pace of expansion, however, it can be difficult to identify exactly how many outlets are actually up-and-running.

"It changes every day," Simon Cooper Marriott International's managing director, Asia Pacific, told the Wall Street Journal.

The Ritz, Marriott, JW Marriott, Courtyard, Marriott Executive Apartments and Renaissance brands are the focus in China, with quickly building scale a primary goal.

"We don't want to do one of anything unless we can do 100," Cooper said.

Tailoring specifics to serve the precise requirements of guests has formed another core aspect of Marriott's model, as shown by modifications made to the Courtyard chain.

"In the States, it's about having a nice, hot breakfast. In Asia, there needs to be at least two restaurants and a meeting space. It's a lot more full-service," Cooper said.

Among the challenges of operating in China particularly is targeting appropriate areas, with the nation experiencing rapid urbanisation and intense competition. Local authorities have also developed ambitious plans for growth.

"When it comes to locations in China, it's sort of 'You're damned if you do, and damned if you don't.' If you miss an opportunity, it'd be way too expensive to enter later on," said Cooper.

A demonstration of this came from opening a Marriott in Sanya, China's southernmost city, which had not yet reached a level of maturity typically considered to be essential.

"It was a real stretch to sell the idea to headquarters in Washington. There was nothing there at all. But you have to trust that when the government says they're going to do something, it'll get done. You have to believe in that vision," Cooper said.

Marriott also expects its affordable Fairfield Inn chain to remain absent from China for the foreseeable future, largely as a result of economic fundamentals.

"We are not doing any Fairfields in China because there's a lot of price compression, a thin space between the price of low-end and high-end brands," said Cooper.

"In India, however, has a much more robust middle market, and so we do have a Fairfield in India."

The newest addition to Marriott International's regional portfolio is a Ritz-Carlton in Hong Kong, replacing a previous iteration, which closed three years ago.

Cooper argued a key reason behind this decision was that the style of the old site proved out-of-keeping with the company's strategy and evolving demands.

"About ten years ago, we realised ... every hotel should look different," he said.

"Today, we strive to be consistently inconsistent. For example, we used multiple interior designers for our bars, restaurants, and rooms, so there was a clear threshold people could cross to enter a new experience."

Around 16,000 applications were received for jobs at the Ritz-Carlton in Hong Kong, but Cooper suggested that recruitment is a complicated issue.

"This is the most competitive battleground for human talent in the world," he said.

Data sourced from Wall Street Journal; additional content by Warc staff