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For years now, the hotel industry has had a yen for development overseas, particularly in China and

India, countries, it assumed, had burgeoning middle classes with few quality hotels to stay in. Conversely, these countries were steadily doing more business with their western counterparts, so business travelers needed quality hotels to stay in when they traveled to these countries. It sounded all well and good: supply was lagging demand, so the logical step would be to build more hotels to meet demand. And so the hotel brand companies looked to up their presence, signing management agreements by the bushel, for hotels in such destinations as Shenzhen in China and Bangalore in India. No longer was it enough to be represented in major cities Mumbai, Beijingsecondary and tertiary markets would be money makers. It sounded all well and goodand still may be. However, Marriott International's second-quarter earnings announced yesterday, while on the surface healthyincreased revenue per available room, revenue that bested the year priorwere also worrisome: demand growth, Marriott said, was slowing in the Middle East and in Asia, where economic growth is weakening. Marriott's admission dovetails overall economic data coming out of China. The country said its gross domestic product expanded 7.6 percent in the April-to-June period from a year earlier, the lowest since 2009, The Associated Press reports. China also said that retail sales and factory output growth slowed in June. In tandem, the price of oil declined to $87 a barrel. Reuters writes that China's implied oil demand fell 0.4 percent in June from a year earlier to the lowest in 20 months. According to the same article, China is the world's second-biggest oil user and accounts for nearly half of global incremental demand, but an economic slowdown is shrinking its need for fuel. All of this amounts to not-so-good news for the hotel industry. If people have cut back on filling their gas tanks, and companies have cut back on consumption, chances are they aren't spending big at hotels. Marriott has an eye to have 4,000 hotels in 90 countries across its 14 brands within two years. Much of this growth will be in China, where the company expects to have 100 hotels by 2014, doubling its current number. Marriott isn't the only one with international exposure. Starwood Hotels & Resorts Worldwide will also look to double its presence in China, as is Hilton Hotels Corp., and just about every other hotel company, which saw potential in overseas markets. However, overbuilding has its consequences; namely, when you build too much inventory too quickly and find that rooms are going empty. A Bloomberg item points to Marriott's Q2 conference call wherein the hotel operator, whose brands include JW Marriott and Courtyard by Marriott, said that some areas in China and India are hurting because there are too many hotel rooms with too little demand. This is the kind of language that batters stock prices. And it did. In the aftermath of Marriott's second-quarter reveal, its stock price tumbled 6 percent. Meanwhile, other hotel operators were not immune. Starwood shares lost 5.6 percent, while shares of Hyatt Hotels Corp. dropped 4.5 percent. Could Marriott's data just be the start of more disappointing news? We still haven't heard second-quarter reports from the other large hotel operators, namely Hilton, Starwood, Hyatt and InterContinental Hotels Group. But they are coming. Gird your loins.

Marriott International and Accor each benefited during the first quarter from an across-the-board increase in hotel-room demand in the U.S., ranging from Marriott's Ritz-Carlton luxury brand to Accor's Motel 6 economy badge.

Marriott's first-quarter profit rose 3% from a year earlier as higher franchising fees more than offset the drop in earnings caused by

last year's spinoff of the company's timeshare business.

Factoring out exchange-rate effects, Marriott hotels' revenue per available room (RevPAR) rose 6.7% from a year earlier. North American RevPAR advanced 6.9%, largely on a 3.6% increase in average room rate. The company's full-service and luxury hotels such as Ritz-Carlton and Marriott posted a 7.1% increase in RevPAR, while RevPAR for select-service badges such as Courtyard and Residence Inn rose 6.7%.

The company forecast RevPAR growth of between 6% and 8% for 2012 both in North America and overseas, up 1 percentage point from Marriott's February forecast.

"We've got both occupancy and room rates driving RevPAR growth, which is comforting," Marriott CEO Arne Sorenson said in a conference call with analysts, adding that the combination of an increase in group bookings and limited supply growth will help Marriott's financial performance improve throughout the year. "We expect supply growth to remain very slow for a number of years."

Overall, net income was $104 million, up from $101 million a year earlier. Revenue fell 8.2%, to $2.55 billion, because of last year's spinoff of the company's timeshare business, which had accounted for about 10% of Marriott's sales. With more hotel-room demand, Marriott's franchise fees rose 22% from a year earlier, to $122 million. Excluding the timeshare business, Marriott's sales were virtually unchanged.

As for Accor, the Paris-based company reported that its Q1 revenue rose 1.2% from a year earlier, to about $1.8 billion. Worldwide comparable-store sales, excluding currency effects, increased 4.5%, while in North America, where Accor operates or franchises about 1,100 Motel 6 properties, same-store sales advanced 6.8% from a year earlier.

Growth markets

Meanwhile, overseas, both Marriott and Accor reported surges in demand in Asia-Pacific and Latin America that offset the relatively stagnant growth in Europe and, for Marriott, declining revenue in its Middle East/Africa region.

Marriott's demand growth was fastest in its Asia-Pacific and Caribbean/Latin America regions, with RevPAR growth greater than 10%. Marriott has said it would more than double its number of hotels in the Caribbean and Latin America to more than 140 within the next five years. Overall, Marriott's overseas RevPAR gained 5.3% from a year earlier.

Accor's overseas growth was also led by Latin America and Asia-Pacific, where comparable sales for economy brands like Ibis and

Etap rose 17% in Latin America and 13% in Asia-Pacific. Accor said last year that it was looking to cut debt and sell off some of the real estate under its Motel 6 hotels in part to expand its Ibis brand throughout China.

Earlier last week, Marriott said it agreed to sell its ExecuStay corporate housing business to Oakwood Worldwide for a price that wasn't disclosed. ExecuStay has more than 700 locations across the U.S.

the largest publicly traded U.S. hotel chain, plans to double the number of hotels in China by 2014 to meet growing demand in the worlds third-largest tourism destination.

Marriott, whose brands include Ritz-Carlton and Courtyard, will open about 50 hotels in China, where it currently has 58 in its biggest market after the U.S., Asia-Pacific Chief Operations Officer Craig Smith said in an interview in Shanghai yesterday.

Enlarge image

Daniel J. Groshong/Bloomberg

A fence surrounding a construction site displays a ripped logo of Marriott Hotels and Resorts on the Cotai Strip in Macau, China.

A fence surrounding a construction site displays a ripped logo of Marriott Hotels and Resorts on the Cotai Strip in Macau, China. Photographer: Daniel J. Groshong/Bloomberg

5:30

April 19 (Bloomberg) -- Frits Van Paasschen, chief executive officer of Starwood Hotels & Resorts Worldwide Inc., owner of the luxury St. Regis and W brands, talks about the hotelier's business outlook and growth strategy. He speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

5:15

Feb. 14 (Bloomberg) -- Richard Solomons, chief executive officer of InterContinental Hotels Group Plc, talks about annual profit and the outlook for the industry in 2012. He speaks with Linzie Janis on Bloomberg Television's "Countdown." (Source: Bloomberg)

China is big for us, Smith said. This is a vibrant part of the world. Part of our job is to make sure that we develop our plans to capitalize on the growth here.

Marriott is expanding even as Chinas economic growth slowed to almost a three-year low of 8.1 percent in the first quarter. The number of internationally branded hotel rooms in China is expected to surge 52 percent by 2013 after rising 62 percent in the past five years, according to Jones Lang LaSalle Hotels, which tracks data in 30 Chinese cities.

The economy of Asia is really led by the power house in China, Smith said. Its going to continue to grow.

Marriott, based in Bethesda, Maryland, began operation in Asia in 1989 and manages about 134 hotels in the region. It plans to increase the number to 150 by the end of the year, led by openings in China and India, according to Smith.

Smaller Cities

The company, which opened a 342-room Renaissance hotel this week in Huizhou of southern Guangdong province, is not concerned about occupancy rates and over supply in Chinas less affluent second-and-third tier cities, Smith said.

In those cities, it happens sometimes that people knock on our door and say I want a 600-room hotel or a Ritz-Carlton, he said. We go back and say you dont need that. Youll tell the owners the truth at front and make sure they have the right brand.

Marriott, managing all their hotels in China, expects demand will outweigh the supply in the long run in the second- andthird tier cities, so long as they are in the right locations and have branding power, Smith said.

China is the worlds third-largest tourism destination, according to the World Tourism Organization.

Starwood Hotels & Resorts Worldwide Inc. (HOT) expects China resort business to provide growth in the next 10 to 15 years, Chief Executive Officer Frits van Paasschen said in an interview last week. InterContinental Hotels Group Plc (IHG), owner of the Holiday Inn brand, will begin opening locations as soon as next year under a new brand designed to appeal to Chinese travelers, Chief Executive Officer Richard Solomons said in an interview last month.

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at bcao4@bloomberg.net

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Human Resource Management - Best Practices at Marriott International



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Case Code : HROB064

The Marriott Way

Case Length : 18 Pages Period : 1997-2004 Pub Date : 2004 Teaching Note :Not Available Organization : Marriott International Industry : Hospitality Countries : USA

Marriott's history of taking care of its employees dated back to its early days, when its founder, JW Marriott, counselled the company's employees individually on their personal problems at his first hotel. He valued their presence, kept them posted about the latest happenings in Marriott and gave them excellent training. JW Marriott always ensured that employees who joined the company felt themselves a part of the Marriott family. He made managers responsible for the satisfaction of their subordinates. JW Marriott was always conscious of

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the fact that in the hospitality industry, providing the best service to customers was paramount...
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The HR Practices

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Apart from providing a competitive pay package, Marriott strived to give its employees a good work life. The company gave equal importance to non-monetary factors such as work-life balance, good leadership, better growth opportunities, a friendly work environment and training. Employees stayed longer with Marriott as they were happy with these non-monetary factors and thought them more important. Marriott's culture and guiding principles had a significant influence on the company's HR practices including manpower planning, recruitment and selection; training and development, employee retention and welfare initiatives and grievance redress. Manpower Planning, Recruitment and Selection Marriott attached a lot of importance to manpower planning. It started right from entry level and went through to higher positions. Every unit of Marriott (division or department) prepared its expansion plans over the next couple of years, and, in the process, decided on the number of entry level and managerial employees required for the expansion. Details on the number of new units planned in the given time frame (two to five years), a rough picture of the likely organization structure, the time required to develop employees who could take managerial positions, current availability of employees within Marriott and the necessity to recruit externally - all these were determined during the planning process...
Training and Development

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Once the right candidates were recruited, it was important to get them accustomed to the company's unique work environment. Training

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and development played a key role here. These programs varied between frontline employees and managerial personnel. Over time, training programs evolved from classroom- based teaching to interactive multimedia training. Fresh recruits went through an eight-hour initial training session, during which they were given an overview of Marriott and their individual roles. A unique feature was that senior hotel employees served lunch at the first session. During the three- month training period which followed, a mentor, addressed as 'buddy' was allotted to each recruit. The mentor guided the trainee. All trainees attended refresher sessions after the first and second months. On the final day of training, recruits enjoyed a sumptuous feast at a Marriott hotel...
Employee Retention and Welfare Initiatives

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Retaining employees in the hospitality industry was vital as the cost of recruiting and training new employees was very high. Marriott operated in an industry where every day counted and weekends and holidays generated more business than weekdays. Customer service had to be provided on a 24/7/365 basis. The implication was that employees had to go through a hectic work schedule; an average work week lasted more than 50 hours. With the increasing work load due to rising customers in the late-1990s, several key managers at Marriott left. They wanted to devote more time to their personal lives and their jobs at Marriott were not helping the cause. Facing this challenge, Marriott launched a new program called Management Flexibility in February 2000 on a pilot basis at three of its hotels.

The aim was to assist Marriott's managers in balancing their professional and personal lives, without negatively affecting customer service or the company's financials...
Grievance Redressal System

By the mid-1990s, Marriott had a comprehensive complaint resolution system in place, known as the Guarantee of Fair Treatment (GFT), to ensure that employee grievances were addressed. Under GFT, complaints passed through successive stages in Marriott's hierarchy, starting with the immediate superior, depending on whether or not the said employee was happy with the redress response given at each stage. However, given the decentralized nature of Marriott's operations, and with managers handling several tasks, resolution of complaints through GFT did not quite produce the desired results. It, therefore, decided to try new methods of complaint resolution while continuing with GFT. These methods included mediation, a toll-free hotline and peer-review...
The Benefits Reaped

Marriott's efforts over the decades to develop an employee-friendly work place earned it widespread recognition in the hospitality industry. The awards it received for 'the best place to work' were testimony. (Refer Exhibit IV for awards received by Marriott). The company reaped benefits like higher employee satisfaction and less turnover. Employee satisfaction could be gauged from the 2003 Associate Opinion Survey, in which 90% of employees surveyed expressed great pride in working for Marriott... That guest's room may be our product, but our associate's caring attitude is our value. We can't measure it with statistics, and we can't manufacture it. We can deliver that value only if we can attract, retain and inspire the best people - with what we call 'The Spirit to Serve.'''1 - JW Marriott Jr., CEO, Marriott International. "The comments from our customers is not about how nice the building is but about how nice the people are, how good the service is, how hospitable the employees are. That is what makes the difference, because people from the top all the way down to the organization really care."2 - JW Marriott Jr., CEO, Marriott International.

The Spirit to Serve

Once, when a customer checked in at an Anaheim Marriott hotel, she was in a very disturbed state of mind. It was on her way to the hotel that she learnt of her sister's death. The worst part was that she had to wait the whole night at the hotel to board a flight the next morning. As she checked into the hotel, Charles, who was looking after room service, asked her why she was upset. On hearing her reply, he assured her of any help she might need through the night. Soon after, Charles returned with a pot of coffee and a piece of apple pie, at his own expense. He also handed her a sympathy card, signed by seven of his colleagues. By pooling some money contributed by his colleagues, he brought some flowers and gave them to her, saying, "We just wanted you to know you're not among strangers here."3 Narrating this incident to JW Marriott Jr., the CEO of Marriott International Inc4 (Bill Marriott), the customer wrote, "Mr. Marriott, I'll never meet you. And I don't need to meet you because I met Charles. I know what you stand for. I know what your values are. I want to assure you that as long as I live; I will stay at your hotels and tell my friends to stay at your hotels. That night I realized that you care more about me as a person than you do about the few dollars I spent at your hotel."5 Human Resource Management - Best Practices at Marriott International - Next Page>>

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4] Marriott International is a leading lodging company with more than 2,800 lodging properties in the US and 69 other countries in the world. Marriott operates and franchises hotels under the Marriott, JW Marriott, The Ritz-Carlton, Renaissance, Residence Inn, Courtyard, Towneplace Suites, Fairfield Inn, Springhill Suites, Ramada International and Bulgari brand names. It develops and operates vacation ownership resorts under the Marriott Vacation Club International, Horizons, The Ritz-Carlton

Club and Marriott Grand Residence Club brands; operates Marriott Executive Apartments; provides furnished corporate housing through its Marriott ExecuStay division; and operates conference centres. The company is headquartered in Washington DC, and has approximately 128,000 employees. In the fiscal year 2003, Marriott International reported sales from continuing operations of $9 bn. 5] Terry McKenna, "Customer: service or care?" National Petroleum News, June 2002.

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Basic Recruitment Principles - Concept of Marriotts Recruitment Principles for the modern world.
Marriotts Recruitment Principles are most popular principle according to the recruitment in the modern world.

A new employee should hire friendly way and trains technically to have maximum performance of the employee. It is better to hire people with the spirit to serve and train them to work than hire people who know business and try to teach them to enjoy serving guests. A manager should hire a driver who loves to drive safely and who loves to keep the vehicle clean. This is teaching that this approach works both for delivering excellent service and fro retaining their employees.

The main concern is should be the total compensation. Money is needed to have, but it is not the top concern of a person. But intangible factors taken together, such as work life balance, leadership quality, opportunity for advancements, work environment,

and training far outweigh money in their decisions to stay or leave. To organization, there should have less number of pay matters and more period of work with the organization. From flexible schedules to tailored benefit packages and development opportunities are built systems to address these non monetary factors.

Caring bottom line of the organization is to have for a developing organization. When employees come to work they should feel safe, secure and welcome at the work place. Committed associates are less likely to leave, and associate work commitment is one of the key drivers of guest satisfaction. Managers are accountable for associate satisfaction rating and for turn over rates. It is very good to have, associates meetings about 15 minutes in every day to discuss the matters faced on previous day or the current day and to discuss the goals that has to achieve. This kind approaches of managers is helps to earn loyalty for the organization from each and every employee.

Promote employees when ever it is possible to do. By promoting current employees the organization will gain the loyalty of employee. An employee is a customer for the organization, especially for the department of Human resource. Therefore employee should treat well at all the times, when it can do. Promoting employees will make the chance to them to learn something new, and there fore their life will not be a stereotyped. The smooth changes in life are making them refresh and it will helps to them to reduce their stress while serving to the organization with high efficiency. Also, an opportunity for have a promotion will ma ke an opportunity for has training. All this advancements are caused to make the decision in employees to stay with the organization.

Build the Employment Brand is helps to have good attraction from job seekers. This concept is considering the employee as a most valuable thing in the organization, and this is same as customer attraction practicing in marketing management. If we are considering HRD as a service provider (as it is) then the customers will be employees. Appreciating care and service for the internal customers will make a good mouth of word regarding organization. It will not limit to the internal environment. It will go to the external environment and then jobs seekers will waiting till the organization advertise its vacancy. Potential employees are looking for great work experience when they shop for jobs. Communicating the promise of a great work experience is what employment branding is all about. The basement of this concept is, organizations most valuable resource is Human Resource, Human Capital, drives economic value for the company.
Benefits and Rewards At Marriott, everything we do is built on our culture of people first. From investing in our employees health and well-being, to rewards for hard work and recognition for length and talent in service, Marriott is proud to reward and recognize our employees for the work they do everyday. In addition to competitive benefit packages (which may vary by country according to employment laws and practices) Marriott employees enjoy:

Valuable room rate, food and beverage, and retail discounts at global Marriott locations Well-known training and learning opportunities and educational assistance to ensure youre equipped to do your job and prepared for the next step in your career

(In the ordinary course of business, compensation and benefits programs evolve as business needs and laws change. Therefore, the benefits outlined here may be subject to change.)

Workplace Recognition At Marriott we recognize our employees for their commitment to delivering exceptional guest experiences and their passion for our business, including recognition of:

Non-management employees who demonstrate outstanding commitment to our guests, and recognition of managers who demonstrate exceptional leadership each quarter. Employees for their contributions to the success of their location as well as demonstrating commitment to their local communities. Years of service, at 5 year intervals. Employees with 25 years of service with free weekend stays at Marriott properties around the world.

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Culture and Global Diversity and Inclusion Marriott founder, J. Willard Marriott coached managers to take care of your employees and theyll take care of guests. Its this philosophy that is the cornerstone of our culture and the foundation of our success. We are committed to providing an environment where employees have the opportunity to achieve their potential, are highly engaged and are empowered to deliver great guest service. We are proud that our inclusive culture is the main ingredient that sets us apart from other companies. We know that when our employees feel valued and respected, they'll help make our guests feel that way too.

Marriott Hotels fined for hatch fall


22 October 2010 Lucie Ponting Add a comment

The Marriott Hotels chain has been ordered to pay almost 20,000 in penalties after a contractor suffered serious injuries when she fell around 2.5 metres through a closed access hatch.

Margaret Davis was at the Bristol Marriott Hotel City Centre in November 2009 to carry out a survey of its plant rooms with a view to improving insulation. As she tried to get into the Bristol Suite plant room, she stepped on a closed access hatch and fell through it onto a concrete floor below. She suffered a compressed fracture of her vertebrae and a fractured heel.

When officers from Bristol City Councils public health services team investigated the accident, they found that Marriott had not assessed the risks associated with the hatches. Principal environmental health officer Paul Tregale said the access hatches were not constructed to withstand the weight of a person and not adequately guarded to prevent people standing on them. Marriott Hotels International, which operates around 60 hotels in the UK, pleaded guilty to breaching Section 3(1) of the Health and Safety at Work Act by failing to protect contractors from risk. On 20 October, Bristol magistrates fined the chain 15,000 and ordered it to pay full costs of 4607.