Welcome to my new blog. I’ll be making regular postings to share my thoughts on a wide variety of issues – from politics to business to baseball, and lots more in between. You can see some of my experiences in these areas in my bio. I’ll be drawing on some of the lessons learned over the years. Please stop by whenever you can.
I wanted to kickoff this blog by talking about something that’s near and dear to my heart: Some big news coming out about the hotel industry.
I have been in the hotel business for 30 years (eight of these as President of Marriott Hotels and Resorts) and in the world of electronic media for the past five years. My experiences during this time have impressed upon me the power of the nexus of hotels and technology. My role as a founding shareholder and Advisory Board member of TIG Global (a leading independent electronic booking source for hotels) has furthered my interests and motivated me to learn more, and even to occasionally share some of my observations on selected developments in business and perhaps politics. In short, it’s time for even me to join the market place of the 21st Century.
My first such observation concerns the Blackstone acquisition of Hilton – a blockbuster of a deal by any standards. When consummated, this acquisition will be a terrific result for Hilton shareholders, and Hilton will be the brightest star in Blackstone’s lodging galaxy.
However, do not expect other hotel companies to follow suit and be acquired. This is particularly true of Marriott. Hilton is a unique blend of hotel assets and a management company with great value coming from both components. Most hotel companies follow a different model. Marriott, for example, is largely a management company with minimal ownership of hotel assets. In fact the sort of selling of hotel assets and conversion to almost a pure management company began when I was President in the mid 1980s. This trend followed with many other hotel companies separating out its hotel assets, aided by the rapid growth of hotel REITS which have taken ownership of these assets.
Thus, in the case of Marriott, you have the world’s largest hotel management company with leading brands from Ritz Carlton at the top to motels like Fairfield Inns. Further, you have an ingrained culture that started 60 years ago that celebrates and values employees, develops managers, and has led to an outstanding level of consistency of hospitality service in all brands. It is this dedication to employees and service that has fueled Marriott’s growth and led to the consumer preference enjoyed by its brands. Many other hotel management companies have their own particular culture and philosophy. In my view, it would be difficult if not impossible to hold this type of culture together if a company were to be sold to a non-lodging firm.
Thus, for now applaud the Blackstone acquisition of Hilton for its brilliance and enhancement of shareholder value. But don’t expect more of the same.
But you can expect to hear more from me here. Interested in your thoughts.