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Arne M Sorenson, president and chief executive officer of Marriott International, India's largest hotel company, talks about how he aims to capture the mid-market segment, the fastest growing for the sector, as they open their 100th hotel in Bengaluru. Edited excerpts.
You are known for being a business that runs on the Marriot legacy of a family-centric value system for employees. How easy is that to implement in India?
We have to be careful about universal truths that are not necessarily true when it comes to different cultures around the world. But there are some universal truths like people take pride in their work when they are allowed to do so, and they will if you give them enough power and mean it. That's what we have been about for decades. 'Take care of the associate, the associate will take care of the guest and the guest will come back again and again’ is how we see it.
Very few can write a $13.5-billion cheque for an acquisition (Starwood) with the calmness you have. What's the secret?
It is about execution and the big risk is that there will be a stumble afterward. The reason our stock has performed well is because we did not stumble. In fact we signed two new hotel deals a day last year - 770 hotels. Both companies said this is something we want to be a part of.
Why did you buy Starwood?
We initially decided not to pursue it but then changed our minds a few months later. We became convinced that we could do better by having more choices and more aspirational destinations. Starwood made us bigger with its loyalty programme. It was not about Airbnb, it was more about Google, Facebook and online travel agencies, and all of the technology platforms that have enough stickiness to get in the way of our relationships.
India is an under-served market and reports indicate in four years there will be a shortage of rooms. What is your strategy, especially for mid-market hotels?
Our select group of hotels, which include the Fairfield and Courtyard brands, will open 10-15 hotels each over the next three years, and will account for 45% of our portfolio.
The lower-economics of the mid-market hotel consumer is that he wants white goods and full-service features and amenities, and not care for loyalty programmes?
Well, we see that he wants the loyalty points so he can take his wife and kids for a holiday when he is not working. About half of our business is through loyalty programmes, worldwide.
What percentage of your hotels are mid-market? What is the fastest-growing segment?
It is about a third. A third luxury, a third premium and a third select, which is mid-market, and includes Fairfield and Courtyard. Mid-market is the fastest growing.
What is the hardest part of managing 30 different hotel owners here in India?
I do not think it is uniquely for India, I think over the world it is that 'nothing is ever good enough". No matter how well things have gone, we want them to be even better. More margins. So our owner community, I think they feel like we are succeeding but at the same time they want even more.