So as General Manager of The Heights, I was fortunate enough to receive an invitation to Boston College’s Chief Executive Club meeting on January 17th. The Club serves to gather many of Boston’s business leaders and connect them in an open setting. It then culminates with a keynote speaker from a prominent company, who discusses his or her recent work and plans for the future. Executives from Disney, Nike, IBM and the like have gone through its doors, and this past one featured Arne Sorenson, the President and CEO of Marriott Hotels. Along with meeting many amazing individuals and trying some very good food, I gained an awesome amount of insight from Sorenson and his various endeavors. As a result, I figured it would make sense to focus my first blog post on the recent experience and what I learned! Contrary to what I believed, there is much more to running a hotel than clean bed sheets and tiny shampoos.
The Renaissance Man
Before getting into the bulk of it, a brief history on his career would help to preface: Sorenson started in litigation as a partner for the law firm Latham & Watkins in Washington, D.C. He then joined Marriott in 1996, acting as the Executive Vice President, Chief Operating Officer, Chief Financial Officer, and President of European Lodging (among other roles). Finally, he took over as President and CEO in 2012, the first person to ever do so without the last name “Marriott.”
More than that, he arguably came in as the most experienced and well-rounded one yet – after seeing the business world from so many different angles, he offers much more professional wisdom than anyone who simply led due to family lineage. Such well-roundedness has also put him in a strong position to handle increasing technology and challengers.
An Unprecedented Enemy
Along the lines of that latter point, the main topic that he discussed was the rising pervasiveness of AirBnB. As the sharing economy grows, Marriott must now face a type of competitor that it has never seen before. In other words, how does one outpace a company whose only physical restriction is the number of homes worldwide?
Well, if you’re Arne Sorenson, apparently you conquer: the CEO recently acquired Starwood Hotels & Resorts for $14 billion in 2016. With 11 owned brands such as Sheraton and Westin, the acquisition will substantially widen Marriott’s reach and narrow down the hospitality industry as a whole. He’s not done yet, though, because apparently you build: he also unveiled his plan to construct a new hotel every 14 hours for the next 3 years. When fully mapped out, that’s about 1,880 hotels by 2020. While I cannot even fathom the logistics behind that, Marriott is clearly looking to beat out AirBnB in terms of tangible capital as well.
Furthermore, Sorenson plans to adjust his company to changing times and introduce unique technology. Included within this is a more efficient and user-friendly mobile app for booking rooms. When potential consumers can more easily navigate, they become more likely to buy. Additionally, he wants a complete overhaul of the grueling hotel check-in process, and allowing confirmed guests to remotely do so through that same application. This would significantly speed up the procedure and allow check-in employees to focus their efforts on more important matters. Thirdly, once they make it to their room, guests will notice very soon that they can also control much of it on their phones. Doors can be unlocked, televisions can be controlled, and lighting and temperature can both be adjusted. Although it will require a little more time to roll out, the notion of a “smart hotel” is certainly on the horizon for Marriott. Therefore, it will definitely look to keep pace with AirBnB with technological savviness.
Finally, Sorenson believes that his hotels offer a human element that AirBnb cannot – He emphasized throughout the talk that customer satisfaction was at the peak of his priorities. He has repeatedly taught his managers and employees to offer a warm welcome for all residents. Through kind staff and excellent service, he feels that he can enhance the nuances of one’s stay as much as possible. Simultaneously, though, Sorenson aims to constantly hear feedback from guests and fix any issues immediately. When someone has a problem or negative experience, he wants to ensure that such an event will never happen again. Lastly, he has formally incentivized his buyers to return through expanding Marriott’s Loyalty Program, which offers increasing perks for staying in more and more hotels. Therefore, especially when considering that AirBnB has no human-based aspects, Sorenson has undoubtedly positioned his company to stand out in cordiality.
Connecting to Class
While these strategies all provide a great response to competitors, they also reveal some of the best ways to lead one’s company. Sorenson demonstrates a passion to scale and continue growing, to make Marriott a global monopoly for hotels. So long as he holds the reins, it will continue acquiring and building all around the world. Similarly, he conveys a willingness to learn and adapt in the face of new challenges, namely those of technological disruption in his industry. He has found a way to apply those changes and implement them within the core of his own business. Lastly, he has recognized Marriott’s competitive advantage in a superior guest experience and worked tirelessly to improve it.
So, in relating this experience to our course, I feel that the CEOs of our discussed companies could all learn at least one thing from Arne Sorenson’s leadership. He has clearly been successful in his five-year span, and I would love to compare his approach with those of other executives.
Moreover, I find his thoughts particularly applicable for this week of class, as we look to discuss AirBnB and its competitors. Despite recent regulations that have hindered its growth, the platform is clearly affecting hotel chains and how they operate (as made clear by Sorenson). This tension will only become more intriguing over time, as transportation becomes quicker and concepts like augmented reality become integrated into vacations. It will be very interesting to see how these two entities build off of each other as those changes come to fruition.
Finally, Sorenson ended his talk by saying that “people love traveling the world,” and “as long as that’s true, we’re going to be the best in our industry at giving it to them.” As we go through these various companies in our class, then, I am very curious to see how their respective leaders strive to say the same.
For anyone interested in learning more about this topic, here are some extra links that I found:
Sorenson and his vision: https://www.reuters.com/video/2017/10/03/spotlight-marriott-international-ceo-arn?videoId=372657034
Acquisition of Starwood Hotels & Resorts: https://www.cnbc.com/2016/09/23/marriott-buys-starwood-becoming-worlds-largest-hotel-chain.html
Marriott’s various brands: http://members.marriott.com/brands/
Competing with AirBnB: http://www.businessinsider.com/marriott-wants-to-be-the-next-airbnb-2017-9
Thanks for reading!