 "<b>Lunch with BS:</b> Arne Sorenson")
The hotel industry might be stuck in a prolonged downturn, but Arne Sorenson is in a great frame of mind on his second visit to India this year. "Marriott's plate in India is never full," as far as expansion is concerned, he says. Eight of his colleagues in India sitting across a dining table meant for just six people nod in unison.
At this moment, however, the plate before Marriott International's president and chief executive officer is more than full - a result of the steward's indulgence. Sorenson had asked for an Indian thali with lots of dal ("it's my favourite," he says) but the stone platter is packed with almost everything under the sun - chicken biryani, chicken tikka, fish, a couple of vegetable dishes, dal makhni and piping hot rotis. "You are a mischief-maker," Sorenson jokingly tells the young man who takes it as an encouragement for proceeding to explain the recipe for each of the dishes. Thankfully, he is stopped midway by one of his colleagues because of time constraint. The background music is also suitably lowered so that the boss is audible.
Sorenson says he has already got a taste of how Indians treat their guests - since morning, he has been offered north Indian breakfast, followed by a bowl of noodles and then a south Indian brunch. It must be a routine professional hazard for a global boss visiting one of his new hotels and we are not surprised by the 57-year-old Sorenson's decision to concentrate more on the fresh lime and soda.
Marriott's business model, Sorenson loves to emphasise, is unique. It doesn't own hotels - of the 4,100 properties under its control worldwide, it holds title to just 10 and its only "product" is customer service. For this, it charges its joint venture partners (largely, the property owners) in India three per cent of a hotel's sales, plus 8-10 per cent of its profits. Globally, the figures are three per cent and 25 per cent, respectively. Sorenson thus talks about two sets of customers he has to take care of: first are the guests and then the joint venture partners. "We've got to make sure that we are not only running the hotel in a way that is successful for our hotel guests and our brands, but are successful for our partners financially," he says, adding the group doesn't believe in joint branding of properties. Which means, chances of it collaborating with another hotel chain (like the ITC-Starwood and others) are very low.
We are at the JW Cafe, one of the four restaurants at the new JW Marriott at Mumbai's T2 Terminal area. Mumbai's second JW Marriott (the other being the one on Juhu beach) is one of the 28 properties that Marriott manages in India, even as construction is on in full swing for as many as 52 more. Apart from these two, Mumbai also has the Renaissance, one Ritz-Carlton property and perhaps a Bvlgari in the future (all part of the Marriott brand stable).
He reels out more numbers to make a case for more hotel rooms in India: there is just one room for every 12,000 Indians, as a result of which Marriott has been able to bring in only seven of its 19 brands to the country. The scope is tremendous as more and more Indians are willing to do upmarket travelling - for example, five-six years ago, Indians formed just 35 per cent of the guests staying at Marriott's properties in India; that number has gone up to 65 per cent on a larger base. Measures like visa-on-arrival will lead to an exponential jump in foreign tourists as well.
Sorenson says the point he made to Prime Minister Narendra Modi, whom he met as part of the business delegation that came with US President Barack Obama in January this year, was this: it takes anywhere between 70-100 permits in a city like Mumbai. In comparison, Singapore asks for just six permits. In the US, Marriott can open a property in less than two years. In India, it takes four to five years for the entire project to take-off. "At a time when single-window clearance is the norm globally to save on time and cost overrun, here you need clearances even for things like the height of a structure or the size of swimming pools," he says, adding if more than a third of US' five-million hotel room inventory can be controlled by people of Indian origin, they can certainly do better in India.
One of his focus areas is, of course, Generation X and the Millennials, the younger business travellers who seem to have deeper expertise in food and beverage than he had when he was their age. "Unlike our generation, which would check in and soak in the luxury with the help of room service, the young travellers would just dump their bags in their rooms and be in a public place like this to schmooze, work and drink. Communal tables like these promote social networking as well," he says.
That's the reason Marriott is now as much a technology company as a hotel chain. Until very recently, once a guest came into the hotel, the only technology that was important was the television or entertainment system in the room and then how they used their own technology to communicate with others outside the hotel. Now, it is about how hotel chains use that technology to keep guests engaged - how to offer them seamless service; whether it's ordering food at a certain temperature, getting something delivered at an in-house party or delivering the special service they want at the gym or spa.
So, the Marriott phrase for decades has been take care of your people who wear your name badge every day, they will take care of the guest, and the guest will come back again and again. So, in every market around the world, the hotel chain has gone to the extent of laying down instructions like "66 steps to cleaning a room in 20 minutes". Aren't these minute how-to details absurd? Sorenson laughs and says he agrees that sometimes it is overdone. "No one has an answer when I ask why there should be 66 steps and not 60? But the underlying principle is simple: we are here for customer delight," he says with a laugh.
The food is largely untouched and the steward's suggestion for dessert is turned down. As his aides start looking at the clock for his next meeting, Sorenson takes a trip down memory lane. For the first non-Marriott to head the 85-year-old hotel empire, the learnings since 1996 have been stupendous. As a partner in a law firm specialising in mergers and acquisitions litigations, he helped Bill Marriott, his predecessor, fight a bitter battle against bondholders over Marriott's plans to separate its hotel management vertical from its real estate holdings. The job must have been well done as Sorenson soon joined Marriott but without any deep knowledge of the hotel industry and without a clear career path.
"I agreed to join on the condition that I wouldn't be a lawyer," he says. "I wanted to try something new." His first big deal was buying Renaissance Hotels for $1 billion, thwarting a rival offer of $890 million. With 150 properties back then, 30 of which were in Asia, Renaissance's buy-out more than doubled Marriott's international presence. Over the next 15 years, the man, who was born in Tokyo to a family of missionaries, would run operations in Europe and serve as chief financial officer and chief operating officer, en route to the top job in 2012.
The background music, we notice, is restored to its original pitch as we take his leave.
At this moment, however, the plate before Marriott International's president and chief executive officer is more than full - a result of the steward's indulgence. Sorenson had asked for an Indian thali with lots of dal ("it's my favourite," he says) but the stone platter is packed with almost everything under the sun - chicken biryani, chicken tikka, fish, a couple of vegetable dishes, dal makhni and piping hot rotis. "You are a mischief-maker," Sorenson jokingly tells the young man who takes it as an encouragement for proceeding to explain the recipe for each of the dishes. Thankfully, he is stopped midway by one of his colleagues because of time constraint. The background music is also suitably lowered so that the boss is audible.
Sorenson says he has already got a taste of how Indians treat their guests - since morning, he has been offered north Indian breakfast, followed by a bowl of noodles and then a south Indian brunch. It must be a routine professional hazard for a global boss visiting one of his new hotels and we are not surprised by the 57-year-old Sorenson's decision to concentrate more on the fresh lime and soda.
Marriott's business model, Sorenson loves to emphasise, is unique. It doesn't own hotels - of the 4,100 properties under its control worldwide, it holds title to just 10 and its only "product" is customer service. For this, it charges its joint venture partners (largely, the property owners) in India three per cent of a hotel's sales, plus 8-10 per cent of its profits. Globally, the figures are three per cent and 25 per cent, respectively. Sorenson thus talks about two sets of customers he has to take care of: first are the guests and then the joint venture partners. "We've got to make sure that we are not only running the hotel in a way that is successful for our hotel guests and our brands, but are successful for our partners financially," he says, adding the group doesn't believe in joint branding of properties. Which means, chances of it collaborating with another hotel chain (like the ITC-Starwood and others) are very low.
We are at the JW Cafe, one of the four restaurants at the new JW Marriott at Mumbai's T2 Terminal area. Mumbai's second JW Marriott (the other being the one on Juhu beach) is one of the 28 properties that Marriott manages in India, even as construction is on in full swing for as many as 52 more. Apart from these two, Mumbai also has the Renaissance, one Ritz-Carlton property and perhaps a Bvlgari in the future (all part of the Marriott brand stable).
He reels out more numbers to make a case for more hotel rooms in India: there is just one room for every 12,000 Indians, as a result of which Marriott has been able to bring in only seven of its 19 brands to the country. The scope is tremendous as more and more Indians are willing to do upmarket travelling - for example, five-six years ago, Indians formed just 35 per cent of the guests staying at Marriott's properties in India; that number has gone up to 65 per cent on a larger base. Measures like visa-on-arrival will lead to an exponential jump in foreign tourists as well.
Sorenson says the point he made to Prime Minister Narendra Modi, whom he met as part of the business delegation that came with US President Barack Obama in January this year, was this: it takes anywhere between 70-100 permits in a city like Mumbai. In comparison, Singapore asks for just six permits. In the US, Marriott can open a property in less than two years. In India, it takes four to five years for the entire project to take-off. "At a time when single-window clearance is the norm globally to save on time and cost overrun, here you need clearances even for things like the height of a structure or the size of swimming pools," he says, adding if more than a third of US' five-million hotel room inventory can be controlled by people of Indian origin, they can certainly do better in India.
One of his focus areas is, of course, Generation X and the Millennials, the younger business travellers who seem to have deeper expertise in food and beverage than he had when he was their age. "Unlike our generation, which would check in and soak in the luxury with the help of room service, the young travellers would just dump their bags in their rooms and be in a public place like this to schmooze, work and drink. Communal tables like these promote social networking as well," he says.
That's the reason Marriott is now as much a technology company as a hotel chain. Until very recently, once a guest came into the hotel, the only technology that was important was the television or entertainment system in the room and then how they used their own technology to communicate with others outside the hotel. Now, it is about how hotel chains use that technology to keep guests engaged - how to offer them seamless service; whether it's ordering food at a certain temperature, getting something delivered at an in-house party or delivering the special service they want at the gym or spa.
So, the Marriott phrase for decades has been take care of your people who wear your name badge every day, they will take care of the guest, and the guest will come back again and again. So, in every market around the world, the hotel chain has gone to the extent of laying down instructions like "66 steps to cleaning a room in 20 minutes". Aren't these minute how-to details absurd? Sorenson laughs and says he agrees that sometimes it is overdone. "No one has an answer when I ask why there should be 66 steps and not 60? But the underlying principle is simple: we are here for customer delight," he says with a laugh.
The food is largely untouched and the steward's suggestion for dessert is turned down. As his aides start looking at the clock for his next meeting, Sorenson takes a trip down memory lane. For the first non-Marriott to head the 85-year-old hotel empire, the learnings since 1996 have been stupendous. As a partner in a law firm specialising in mergers and acquisitions litigations, he helped Bill Marriott, his predecessor, fight a bitter battle against bondholders over Marriott's plans to separate its hotel management vertical from its real estate holdings. The job must have been well done as Sorenson soon joined Marriott but without any deep knowledge of the hotel industry and without a clear career path.
"I agreed to join on the condition that I wouldn't be a lawyer," he says. "I wanted to try something new." His first big deal was buying Renaissance Hotels for $1 billion, thwarting a rival offer of $890 million. With 150 properties back then, 30 of which were in Asia, Renaissance's buy-out more than doubled Marriott's international presence. Over the next 15 years, the man, who was born in Tokyo to a family of missionaries, would run operations in Europe and serve as chief financial officer and chief operating officer, en route to the top job in 2012.
The background music, we notice, is restored to its original pitch as we take his leave.