Marriott: king of the land of nod

Inner Harbor East will give it 41% of downtown hotel rooms

Lodging

September 09, 1999|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

When Marriott International Inc. begins operating a pair of new lodging projects being built in Inner Harbor East, it will manage 41 percent of all the hotel rooms downtown, giving the Bethesda-based company a significant advantage over local competition.

In all, Marriott will operate four distinctly different hotels downtown containing 2,104 rooms beginning in early 2001, and be the only company to manage multiple hospitality properties in the city.

"The obvious synergy is that they'll be able to refer business to one another," said Warren Marr, director of hospitality and leisure consulting at PriceWaterhouseCoopers, one of the nation's top hotel counseling firms. "And from a cost point of view they'll be able to share services. Any one company with that sort of stake will be [motivated] to send business to their products. They'll have a more concentrated effort."

Among the services that Marr and others expect Marriott could share are reservations, employee training, laundry, catering, food distribution, sales and perhaps even accounting.

Marriott picked up its fourth local hotel Tuesday, when the developers of a $117 million hotel at Inner Harbor East reached an agreement with the company to manage the 750-room hotel upon its completion in early 2001, replacing the Wyndham International brand. Doubts had arisen over whether Wyndham, beset by corporate struggles, would be able to commit the resources to the Inner Harbor East hotel.

The four Marriott hotels include the 622-room Renaissance Harborplace Hotel at 202 E. Pratt St. and the 525-room Baltimore Marriott Inner Harbor at 110 S. Eutaw St. At Inner Harbor East, a 207-room Courtyard by Marriott is under construction near the 750-room hotel that now will also carry the Marriott flag.

While the four hotels are expected to generate efficiencies for Marriott -- the world's largest hotel manager -- the collection of projects is also expected to help the city market the Baltimore Convention Center.

"Between what we are doing, what Marriott does, what Hyatt and all the other brands do, it'll further our cause of keeping Baltimore in the face of customers, both leisure and convention customers," said Carroll Armstrong, president and chief executive officer of the Baltimore Area Convention & Visitors Association, the agency charged with booking the convention center.

More than just lending its name and reservation system to the four hotels, though, Marriott devotes millions of dollars a year to marketing, advertising and selling groups on Baltimore.

The expenditure for the marketing will about match the convention center's annual marketing budget of about $4.8 million.

At the 31-story Inner Harbor East, the developer and Marriott are projected to spend $2.7 million in the hotel's first year of operation on advertising and marketing. That figure will rise to $3 million in its fifth year, said Michael S. Beatty, an H&S Properties Development Co. vice president.

"This hotel will become part of a family of hotels," Beatty said. "This will give them economies of scale."

Both properties under construction will be owned at least in part by a partnership led by H&S Properties, the real estate arm of baking magnate John Paterakis Sr. The Courtyard is expected to open in the fall of 2000.

But Marriott's spending won't be purely altruistic. While hotel operators such as Marriott are compensated by flat fees for their work, they also receive considerable compensation from incentive and bonus fees based on their ability to raise occupancy levels and average room rates.

Marriott's commitment also will be well into the next century. Under terms of its deal with the Inner Harbor East developers, Marriott will manage the hotel for 25 years, Beatty said.

"The advantage it gives us begins in the variety of brands we have spanning the needs of the customer and goes from there," said Roger Conner, a Marriott vice president.

Pub Date: 9/09/99

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