Marriott chairman: We are a growth company
10/30/2024 20:25
Marriott International chairman David Marriott takes Yahoo Finance inside the company's history and future.
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When you’re the third person to oversee a nearly century old family business, chances are you’ll be asked how you keep the legacy intact.
If you’re Marriott International (MAR) chairman David Marriott, 50, the answer is the company’s longstanding five-pillar business philosophy: put people first, strive for excellence, embrace change, act with integrity, and serve our world.
“We are a growth company,” Marriott told Yahoo Finance executive editor Brian Sozzi on his Opening Bid podcast (video above; listen in below). “We are going to grow organically, but we also need to be looking at the travelers’ [future] needs, and how do we fill [them.]”
With growth in mind, Marriott and his CEO Anthony Capuano are first looking toward emerging markets.
The company now has 530 hotels in China, and 500 more in the development pipeline. As for India, Marriott sports 153 hotels and has 85 in the development pipeline.
"They [India] have a middle class the size of the US population, and people are just discovering the beauty of travel in India. So, there are places all over the globe where we have opportunity," Marriott explained.
His company currently operates nearly 9,000 properties tallying 1.7 million rooms in 141 countries.
Marriott thinks the hotelier can also play more in the experience business, offering vacation packages in the safari, adventure, and wellness categories.
Case in point: Taylor Swift access.
"We've had a phenomenal partnership with Taylor Swift where our Bonvoy [rewards] customers are able to enter into a lottery for tickets to be able to redeem those huge experiences," Marriott says.
Marriott entered a new expansion chapter in 2016 when it spent $13 billion to buy Starwood Hotels & Resorts Worldwide.
The deal — which David helped to integrate alongside his father J.W. "Bill" Marriott, Jr., 92, (then chairman; now chairman emeritus) and former CEO Arne Sorenson — gave Marriott access to top hotel brands such as Residence Inn, Courtyard, and Ritz Carlton.
The greater number of brands led the way for Marriott franchisees to open in new markets and benefit from economies of scale.
Ultimately, the deal was in line with Marriott's growth DNA.
David Marriott is the grandson of J. Willard Marriott, who founded the company in 1927 with his wife Alice Marriott. It started as a nine-seat A&W root beer stand in Washington, DC.
From there, the business rebranded as Hot Shoppes and extended, bringing innovations like drive-ins and the double-decker burger to the masses. Marriott entered the hotel space in 1957 with the opening of a motor lodge in Arlington, Virginia.
Throughout the company’s evolution, J. Willard emphasized the need for his descendants to have a well-rounded grasp on running the business.
As a result, his descendants have worked in a variety of places like hotel kitchens. David began working at age 15 as a dishwasher and has also been a bellman, in housekeeping, and at the front desk.
He rose through the ranks to chairman, a position he assumed from his father in 2022. Deborah Marriott Harrison, David's sister, also sits on the company's board.
With a 66-year career at the family company (including 40 as CEO), Bill Marriott's proudest accomplishment is “the opportunities that we’ve provided for our people,” the younger Marriott added.
The recipe of family and a well run business has worked out for shareholders.
Marriott shares are up 283% since the Starwood deal closed on September 23, 2016, according to Yahoo Finance data. That has out-performed the S&P 500 and Dow Jones Industrial Average gains of 169% and 132%, respectively.
Hilton shares are up 389% during that same timespan. Of the 25 sell-side analysts that cover Marriott, 96% rate the stock either a buy or hold, per Yahoo Finance data.
“[We] can’t say enough positive things about its business model–a geographically and chain scale segment diverse footprint, with asset-light and organic driven net rooms growth, with all of this expected to drive network benefits,” said JP Morgan analyst Joseph Greff in a client note.
Greff rates Marriott's stock at a neutral, the equivalent of a hold.
Three times each week, Yahoo Finance executive editor Brian Sozzi fields insight-filled conversations with the biggest names in business and markets on Opening Bid. Find more episodes on our video hub. Watch on your preferred streaming service. Or listen and subscribe on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].
Grace Williams is a writer for Yahoo Finance.
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