Marriott International President and CEO Shares Hospitality Trends
Arne Sorenson has been global from day one. Born in Tokyo, Japan, the president and chief executive officer of Marriott International, Inc., travels more than 200 days per year, visiting some of the company’s more than 4,300 lodging properties in 85 countries and territories.
Sorenson discussed trends in the hospitality industry and Marriott International’s growth at Georgetown University’s McDonough School of Business on Dec. 3, as part of the school’s Stanton Distinguished Leaders Series.
Sorenson detailed the effects of the increasing popularity of the sharing economy with players like Airbnb and online travel agents like Expedia and Priceline.
“[Online travel agents] sit as technology middle men, essentially, between a hotel and a hotel guest,” he said, explaining that hotels are charged a commission for each guest who books a room through one of the sites. “We end up in this ‘frenemies’ relationship with them…We end up with this relationship where we have to say ‘we have to deliver more value to the folks who book with us directly to give them a real economic incentive.’”
Sorenson also has noticed that hotel guests have higher expectations for their hotel stays.
“If you think about the way we as consumers have evolved over generations, we’re just more demanding,” he said. “It’s not just about the shampoo or the WiFi, it’s about the quality of the bed we sleep in, the quality of the food we eat…it’s not just the amenities, it’s the hotel’s need to be better at providing experiences that cause people to return.”
In November, Marriott International acquired Starwood Hotels & Resorts Worldwide, resulting in the largest hotel chain in the world.
“Starwood is a bit more global than we are. About half of their hotels are outside of the U.S. We have about 25 percent [of our properties] outside the U.S.,” he said. “Long term, there are enormous advantages to being bigger.”
Previously, Sorenson was Marriott’s president and chief operating officer. Earlier, he served as executive vice president, chief financial officer, and president of Continental European Lodging, with responsibility for lodging operations and development in the continental European region, as well as the company’s overall financial functions.
Sorenson co-founded Marriott’s Global Sustainability Council in 2007 and in 2008 he launched Marriott’s rainforest preservation partnership with the Amazonas Sustainable Foundation in Brazil. He also chairs Marriott’s Global Diversity and Inclusion Council serves on the Marriott board of directors’ Committee for Excellence, a board subcommittee focused on diversity.
Jeffrey Macher, academic director of the Georgetown Center for Business and Public Policy, moderated the conversation. After the talk, Sorenson answered questions from students in the audience, including one about how to foster corporate culture and leadership in a global company.
“Particularly in an operating business like ours where it is people-intensive with lots of different cultures, we have to distribute more and more authority away from the center,” Sorenson said. “Empowerment creates teamwork. If it can be done in a way that is collaborative, the more people feel that they are involved. They are empowered to make decisions and make mistakes. We would fail as a business if it was totally dependent on one person.”