Marriott's Root beer roots
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Sunday, July 8, 2007 | 
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No Comments [ Add Comment ]By Michael Rosenwald
The Washington Post
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By Michael Rosenwald
The Washington Post
Doris Schaefgen has a walkie-talkie in her hand as she hustles around the glass-domed lobby of the Paris Marriott Hotel on the Champs-Elysees. She adjusts the chairs in front of the bar. She straightens menu cards on little lounge tables nearby. Someone drops a newspaper while waiting to check in; she rushes to pick it up. And then, satisfied that everything in the lobby is just right, she heads to the top of a set of escalators and waits.
Hanging on the wall above her shoulder: a portrait of two men dressed in dark suits, white shirts and red ties. The older of the men, with sharp gray hair, is J. Willard Marriott, the son of Weber County sheepherders who founded the company in 1927 with a tiny root beer stand in Washington, D.C. The other man, much younger, with sharp dark hair, is Bill Marriott, J. Willard's son, who transformed what had mostly been a restaurant and food-services chain into one of the largest hotel companies in the world.
J. Willard is long gone, but his son, now 75, is still in charge, and 45 minutes ago his private plane touched down at Charles de Gaulle International Airport, where an assortment of chauffeur-driven Peugeots wait for him, his wife and senior members of his company.
He has been on the road for more than two weeks --in Barcelona to meet with the money men who own his hotels in the United States, and now in Paris to show Wall Street analysts around the new European version of his Courtyard hotels.
Schaefgen is performing a task known within the company as the "hover." Marriott is an exacting man. He sees dust that other people can't. He will be strolling through a hotel and notice out of the corner of his eye that the paint in the hallway down toward the bathroom is fading.
Though he is quick to point out problems, Marriott is also legendary for going out of his way to acknowledge the hard work of his 150,600 employees. He's the kind of boss who shakes hands with the maids, chats up the desk clerks and slips tips to those who impress him. Many hotel workers spend their entire careers hoping he will visit their property.
Over the years, Marriott has come to expect the "hover" and everything that tends to come with it, including fresh coats of paint. For that, the billionaire used to carry paint remover in his luggage. He grew tired of brushing up against freshly painted walls and ruining his suits. He is in luck this day; there appears to be no wet paint in sight. Marriott does not arrive to the sound of a band playing, though that has happened a time or two. Dressed in dark pants and a blue sweater, he steps off the escalator with his wife, Donna.
"Welcome back," Schaefgen says. ("That's what you say to a repeat guest," she explains later. "He's a repeat guest, just a very important repeat guest.")
Marriott is not the young man in the portrait anymore. His hair has gone silver. He looks a little tired from traveling. In a few minutes, he'll be in the elevator on his way to his suite, and the tension in the lobby will evaporate.
Marriott's face lights up as he glances around. He is at home here in this lobby, as he is in every other lobby of his 2,800 hotels around the world.
He shakes the hands of his employees, pats a few on the back and then makes his way to the concierge desk.
"How's it going?" he asks.
This may shock anyone younger than 35, particularly those who have watched companies such as Google fork over millions of dollars for firms that haven't reached their first birthday, but there used to be a time when chief executives built their companies over a period of decades. They sold 10 packs of gum one year and 20 the next and 40 the year after that. Some time later, such entrepreneurs came to dominate their particular industries, making themselves extremely wealthy. Warren Buffett belongs to that time. Rupert Murdoch belongs to that time. And so does J.W. Marriott Jr., known to family and friends as Bill, and to his employees as Mr. Marriott.
Marriott was 25 when the company opened its first hotel in 1957, near the Twin Bridges in Arlington, Va., in what seemed, at the time, like a momentary departure for a root beer stand that had evolved into a chain of popular eateries called Hot Shoppes. But Bill Marriott opened another hotel a couple of years later at the Key Bridge, Va., and then he opened one in Dallas, then in Philadelphia.
Sometime next year, the company could open its 3,000th property. (The company no longer owns its hotels. It manages them for hefty fees paid by developers, who own the buildings.) The Marriott name is on more buildings than just about any other family name in the world, except McDonald's. This fact sometimes still surprises Marriott. One night, he saw one of his hotel's awnings in the background of a news report.
"Hey, that's our name!" he said.
But Marriott now appears to be approaching a crossroads. The question that keeps creeping up on him is: How long will he keep doing this?
"I have no plans to retire," he says, and it's easy to tell by his tone and his body language that he means it. He says that his long tenure at the top has greatly benefited the company, providing "a consistency of message, a consistency of style." His employees, he adds, "don't have to worry about things, because they know how I will respond."
Marriott's family, particularly his wife, is not sure what he would do if he weren't working. Donna says the only way she can get him out from behind his desk on Saturdays is to take him to a movie, usually a thriller. Even on vacation, he won't read and relax for more than a week. After that, she says, he disappears to go see hotels. He visits about 300 a year, both his own and those of his competitors.
In short, he still loves what he's doing, and says he continues to feel well, despite three heart attacks in 1989. He had coronary bypass surgery and now keeps in shape with nightly workouts on a treadmill.
"At age 75, he's got the vigor and the capacity of a man a couple decades younger," says Fred Malek, the former Nixon aide who owns several of the company's hotels.
But, of course, the situation is more complicated than that. For starters, Marriott can be stubborn, say people who know him. Why should he retire at age 75? Gordon B. Hinckley, the leader of The Church of Jesus Christ of Latter-day Saints, of which Marriott is a high-ranking leader, is 97. John McCain is running for president at 70. Murdoch, 76, is pursuing ownership of the Wall Street Journal with the intensity of a man half his age. And so much of Marriott's personal identity is tied up in running the company, in being Mr. Marriott, a role that he has played for more than three decades. One doesn't suddenly turn that off.
There are other issues keeping Marriott behind his desk, the most personal and discomfiting being that nobody with the last name Marriott appears ready to succeed him. And though Marriott says that what's important is that the company have the right leader, no matter the last name, it's also true that he would have to retire knowing he wouldn't be writing a letter to one of his four children like the one his father wrote to him in 1964.
Shortly before turning over the company to his son, the elder Marriott, then 64 and not always effusive with praise, got out of bed one morning at 4 and penned these words:
"Dear Bill: I am mighty proud of you. ... You remain humble. It is not often that a father has a son who can step into his shoes and wear them on the basis of his own accomplishments and ability."
Bill Marriott has three sons, who have spent most of their careers working for their father's company. (Marriott's daughter, Debbie, 50, concentrated on raising her children and only recently joined the company as vice president of government affairs.) Stephen, the 47-year-old senior vice president of culture and special events, might have been the obvious candidate to succeed his father until he developed a rare muscular disorder, called MERRF syndrome, that has left him hearing-impaired and legally blind. David is an up-and-comer who serves as senior vice president of global and field sales. But he is only 33, and though his father was about that age when he took over the company, it wasn't worth $18 billion then.
Then there is John. He had risen to one of the most powerful positions in the company, serving as executive vice president for lodging. In 2004, Business Travel News named him one of the most influential executives in the industry. But a year later, John stunned many inside the company when he resigned to run his family's investments -- a move that effectively took him out of the running to be chief executive.
John, 46, says he left because he is "entrepreneurial," though when pressed, he concedes that there were other reasons. "I recognized that my dad wasn't going anywhere soon," John says.
Leaving the company, he says, made it so that he and his dad can be "better friends."
Plus, he remains on the company's board as its vice chairman, sitting alongside his father -- the chairman -- at board meetings.
Marriott says he was "saddened" by his son's departure but wanted what was best for John. Beyond that, he won't talk much about the succession question or the family tensions involved. He's only slightly more comfortable discussing the other challenges ahead.
***
MOST NOTABLY, he wants to prove that a company with the wholesome image, both in tone and style, of its devout Mormon founders can continue to compete for and win the loyalty of younger, more sophisticated business travelers. Many analysts say that is a key issue facing Marriott, which has long dominated the lucrative business travel market.
To keep pace with its competitors, Marriott can't rely solely on its old-fashioned strengths: consistency, efficiency and service, says Chekitan S. Dev, an associate professor at Cornell University's School of Hotel Administration. It also needs to be seen as cool, innovative and energetic.
Marriott is adamant that he is pushing his people to appeal to more sophisticated travelers at all their existing properties.
He notes that the company has reinvented its guest rooms with more modern furnishings and to-die-for bedding. The company is just rolling out new technology that lets guests connect their various gadgets to high-definition flat-screen TVs.
Marriott himself is trying to come across as hip, though at his age that tends to come with contradictions. He has an iPod, but it's mostly filled with Glenn Miller tunes. He recently launched a blog, but he dictates his entries to an assistant because he isn't comfortable with computers.
Finally, Marriott must grapple with the growth issue. Marriott International controls about 9 percent of the hotel market in the United States -- that's tops among management companies -- but many urban and suburban hot spots are saturated. Several weeks ago, the company announced a joint venture with Nickelodeon, the children's TV network, to create a chain of family-oriented water park resorts.
For the most part, however, construction of new hotels has slowed dramatically. So Marriott is looking at the rest of the world, where it has a presence but not dominance.
In Europe, one of the biggest lodging markets in the world, the company has 1 percent of market share. Europe's hotel market, unlike the one in the United States, has been controlled by independent operators. But now independents are declining, and U.S. hotel companies see that as an opportunity to break in.
***
THAT'S WHY THE BOSS WENT TO PARIS: Trailed by the hotel manager and a few executives, Marriott steps into a room at the new European Courtyard in Colombes, 10 minutes outside Paris.
The room features a king-size bed -- an oddity in Europe, where twin beds are the norm -- with a smooth, dark-wood headboard.
The TV has a flat screen, and the outlets for computers and cellphone chargers are on the wall in front of the desk, instead of underneath it, likely sparing thousands of heads from being bumped.
Marriott examines each detail carefully and declares, "I like it. It's got a lot of zip, a lot of pop."
He heads into the bathroom and discovers that the door can also close off the area that includes the toilet. "Hey, that's pretty nifty," he says.
But on his way out of the room, he notices that the threshold features a piece of raised marble. That stops him. "People are gonna have to wheel their luggage over this?" he says. He asks what that feature is called. Nobody answers. Laughing, he says, "I think you call that a mistake."
With the opening of this Courtyard, the company is placing a big bet that a successful American brand can translate into a successful European brand.
Courtyard has fueled the company's growth before. In the early 1980s, when the lodging market for full-service hotels had reached a saturation point in just about every major U.S. city, Marriott decided to take on Holiday Inn with limited-service hotels. The hotels would be built in America's growing suburbs and appeal to a different segment of the lodging market than full-service Marriotts: budget-conscious business travelers during the week and families on the weekend.
Courtyards were stripped down but tasteful. No ballrooms. No room service. No conventions. "Just a better room at a better price," Marriott says.
***
MARRIOTT'S BACKGROUND: Marriott's grandfather, Hyrum, was a sheepherder on the Ogden River delta flats of Utah. Marriott's father, J. Willard, ran sheep with his father, and by age 13, he was a genuine cowboy, riding horses and chasing his animals across the family's land with a six-shooter strapped to his hip. When he turned 18, he was sent east for his Mormon missionary work, and he passed through Washington one scorching September day in the early 1920s.
"If I could sell some ice-cold drinks here," he thought to himself, "I could make myself a lot of money." In 1927, he and his wife, Alice, opened the first A&W root beer franchise on the East Coast, a nine-seat stand on 14th Street Northwest. By then, his father's sheep business had been destroyed by the Depression. Hyrum Marriott had borrowed $20 a head on his sheep before their value plummeted to $3 a head -- a lesson in debt that left a deep imprint on J. Willard.
In Washington, he and Alice charged a nickel for a frosty mug of root beer. The line outside the door was often 40 or 50 people deep, and the demand stayed strong from the day the root beer stand opened in May through the end of the summer. Alice spent her evenings separating nickels stuck together by root beer, and then she loaded the change into brown paper bags, which she delivered to the bank each night well after midnight.
But when fall came, the demand for root beer subsided. J. Willard needed something besides the weather to make his customers thirsty. Then he remembered the spicy tamales he had eaten years earlier in Utah. That was it: He'd sell tamales. Only, he didn't know how to make them. Alice spoke Spanish fluently, so she went to the Mexican embassy and talked the chef into giving her the recipe. J. Willard and Alice renamed their business the Hot Shoppe, and customers began calling him Big Tamale.
Big Tamale added other food to the menu -- barbecued pork sandwiches, burgers, sundaes -- and a few months later, he opened the second Hot Shoppe, changing the name to Hot Shoppes. (The extra p was used to denote a certain sense of class.) Soon, more Hot Shoppes made their debut, including those with the first drive-ins on the East Coast.
When J. Willard noticed that a lot of customers were stopping at his restaurants on the way to the airport, he brokered a deal with Eastern Airlines to deliver food to planes before takeoff, marking the beginning of airline catering.
His sons, J. Willard Jr. (Bill) and Richard, went along with their dad on his visits to the restaurants. Big Tamale was a demanding owner known for inspecting kitchens with a white glove, and moving each piece of equipment to see if he could find dirt. Although he was a perfectionist, he also believed that taking care of employees was the best way to guarantee that they'd give good service to customers, which remains the company's guiding principle to this day.
***
AT HOME, the Marriott boys had more advantages growing up than their father on a sheep farm. They went to St. Albans, Washington's elite prep school. But J. Willard made sure his sons knew the value of hard work. Even when they were at their vacation home in New Hampshire, J. Willard had them doing chores: pulling weeds, building fires, painting the porch. Bill says he was often in charge of polishing his father's white shoes before church on Sundays.
Bill graduated in 1950 and enrolled at the University of Utah, where he worked mornings at a Hot Shoppes his father had opened there. During his senior year, Marriott's speech professor mentioned that he had a daughter, Donna, who was a freshman. Marriott happened to be in the market for a girlfriend, and he began pursuing Donna.
"I was going out with another guy," Donna recalls, "but he kept up. He kept calling." Donna was taking ice skating lessons that required a long trip by bus. Sensing an opportunity, Marriott would drive by the bus stop in his Jaguar, hoping to give her a lift to the rink.
They married in 1955, after Marriott had graduated from Utah and was completing a stint in the Navy as a supply officer.
They moved to Washington, where Marriott went to work for his father.
By that time, J. Willard had purchased a piece of land abutting the Twin Bridges. He originally had planned to build a commissary there to supply his restaurants, but it was the 1950s, and with the birth of the interstate highway program, some business associates convinced him that the land was too valuable for a sort of warehouse.
J. Willard decided to open what would become one of the country's first motor hotels: 365 rooms, with bellmen on bicycles. Rooms were $8 a car, with $1 extra for each person. The more people in the car, the more money the hotel would make. If one guy drove up, Marriott says they would tell him, "Sorry, we're full."
To a family of four, they'd say, "We have a very nice room for you."
In late winter, though, the occupancy rate dropped to 20 percent. Marriott went into his father's office and said, "You've got me doing all these odds and ends around here, why don't you let me run the hotel?"
"You don't know anything about the hotel business," his father said.
"Neither do you," Marriott replied.
***
WITH HIS FATHER'S ACQUIESCENCE, Marriott looked for ways to squeeze more money out of the hotel. He began offering people breakfast in their rooms, getting to work early and delivering meals from the Hot Shoppes restaurant in the hotel.
Marriott built a ballroom on top of one of the guest-room wings and turned an unfinished basement into a meeting room for conventions.
One day, a businessman complained to him that he couldn't get a drink in Virginia -- it was a dry state until 1968 -- so Marriott opened a private club where drinks could be sold. (Though the Marriotts didn't drink, they weren't opposed to profiting from those who did. They figured that if they pushed their religion on their customers, they wouldn't be in business very long.)
Though he didn't know it then, Marriott was laying the framework for what would become the chain's modern full-service hotel. The business seduced him, and he saw its potential for growth as more people bought cars and traveled around the country. But his father wasn't interested in any more hotels.
To build them, the company had to go into debt, and J. Willard had never forgotten his own father's devastating experience with borrowing money.
"Debt was something that he didn't understand, and he hated it," Marriott says. "He didn't want anything to do with it. He was haunted by the Depression."
When Bill pushed to open more hotels, the two had loud arguments.
"Sometimes he never agreed," Marriott says. "Sometimes I had to go around him."
J. Willard wanted to stick with what he knew: the food business.
"One of them was pursuing the status quo, and the other was pursuing a dream and vision of what the world would be like in the future," says Jon Huntsman Sr., a Utah businessman and Bill Marriott's good friend for 35 years.
J. Willard seemed to relent in 1964, when he turned over most of the day-to-day control of the company to Bill, making him president. Three years later, they dropped the Hot Shoppes name and renamed the company Marriott. Bill says his battles with his father never quite ended. He found himself constantly being challenged by his father, who called their disagreements "stretching exercises."
***
BACK IN PARIS, it is time for Marriott to head back to Washington. Though he looks tired, Marriott and his wife are the first members of his traveling entourage to appear outside of his hotel on the Champs-Elysees. Waiting along the busy street are three silver Peugeot 607s. He and Donna hop into the first one.
At the airport, a private jet is waiting on the runway. After he and his wife board, Marriott shakes the pilot's and co-pilot's hands. He says hello to the flight attendant. He asks his staff if there is anything he can get them to make them more comfortable. Then he picks up a bowl of candy and walks around handing pieces out as if it were Halloween.
Marriott doesn't act much like a guy who is ranked No. 204 on Forbes's list of richest Americans. His unassuming, folksy persona is, by all accounts, genuine.
"I have never seen him be unkind to anybody or any employee," Fred Malek says. "He doesn't act like a billionaire. He acts like anyone else."
Marriott uses his wealth and prominence to play an important, if quiet, role in Washington civic life, particularly as a donor to charitable causes and political candidates. He has a long connection to Republican politics, having followed in the footsteps of his father, who organized both of President Richard Nixon's inaugurations and stuck by him through the Watergate scandal and Nixon's resignation. When J. Willard died of a heart attack in 1985, Nixon delivered one of the eulogies.
Among the 2,500 mourners was one of J. Willard's oldest friends, former Michigan governor George Romney, whose son, Mitt, once served on Marriott's board of directors and is now running for the GOP presidential nomination. Marriott's family has donated $390,000 to Mitt Romney's political action committees.
"I know how capable he is and how smart he is," Marriott says. "He's an excellent manager. You need a chief executive who is a chief executive."
In terms of philanthropy, Marriott and his family's foundation have been a key backer, both in name and dollars, of a D.C. memorial for Martin Luther King Jr. The Marriott family foundation has donated $1 million to the memorial, a gesture emblematic of the company's commitment to a diverse workplace.
Marriott doesn't sleep much in his hotels, Donna confides. He hears clerks stuffing bills under doors at 3 a.m. He hears everything, and the principal reason he can hear everything is that he believes he is supposed to hear everything.
At more than 30,000 feet above the Atlantic Ocean during the flight home from Paris, Marriott reclines his chair, puts his feet up and announces: "Night-night." Then he covers his eyes with a sleep mask, crosses his arms and goes to sleep.
***
THERE'S THIS JOKE, Bill Marriott tells dozens of times a year, typically at the beginning of a speech in which someone has introduced him by saying nice things.
"When I think of kind words," he tells members of the Foreign Policy Association, after being introduced by then-Transportation Secretary Norman Mineta, "I remember my father's favorite restaurant joke." Apparently, the traveling salesman goes down to breakfast in the hotel dining room, and the waitress comes to the table and asks, "What will it be?"
He says, "I'll have my eggs over easy and some kind words." She goes back to the kitchen, brings the eggs, sets them down, and then turns to go back to the kitchen. He asks, "What about those kind words?" She says, "Don't eat them eggs."
The room, filled with more than a thousand people, erupts in a long, sustained round of laughter. Marriott licks his lips, knowing he has gotten it off again.
Marriott is not a man given to deep expository remarks about what's going on in his head, and when he is asked to explain, for instance, why he and his company have been so successful, he gives answers that typically equate to throwing his hands up. But one of the reasons is this: the eggs joke.
Marriott can tell that joke -- and get people to laugh at it -- because he lives in the joke's tone and style. It is a link to a simpler time and place in American life, as well as to his company's culture. The way the company treats its employees and customers is connected to Marriott's deep commitment to his religion, which puts family first. Within the LDS Church, Marriott is an area authority and member of the Third Quorum of the Seventy, which makes him a regional spiritual supervisor.
Describing his religion's connection to his company, he once said: "It's basic Christian principles: treating your people right, loving your people. And if you love them, they'll do anything for you."
But circumstances have sometimes forced Marriott to lay people off. After a real estate crash in the 1990s, Marriott's business more or less collapsed, and the company even faced the threat of being taken over.
***
TO HELP SAVE THE COMPANY, Marriott split it in half, creating Marriott International, which manages the hotels, and a company then called Host Marriott, which owned the hotels. He laid off two entire departments -- development and construction -- that included more than 1,000 people. Many other employees endured salary freezes and missed bonuses.
"It was very hard," Marriott says. "I've always taken the approach of trying to avoid layoffs as best as I can."
Although there were about 1,300 layoffs after the September 11, 2001, terrorist attacks, the company tried to limit the number by reducing peoples' hours instead of taking them off the payroll entirely.
Today, Marriott International is consistently voted one of the best places to work in America by Fortune Magazine. The company is renowned for promoting from within: Forty percent of its managers are former hourly workers.
Marriott has for decades provided educational resources, including English language classes, to lower-skilled workers. It was one of the first Fortune 500 companies to offer welfare-to-work programs. Recently, Bill Marriott has taken a public stance in favor of immigration reform that would offer illegal immigrants a way out of the shadows.
Marriott's efforts on behalf of his workers have inspired an incredible amount of loyalty to him. Jim Sullivan, who once worked for Colonel Harlan Sanders ( the Colonel Sanders) and now oversees mergers and acquisitions for Marriott, was once riding with his boss on Marriott's plane and said, "I've learned the secret to your success: People don't want to let you down."
Marriott says he isn't worried about the treatment of people in the company after he leaves, but his wife says otherwise. "He worries about, 'Where is it going to go when I am no longer here?' Even though we have a lot of good people, everyone has their own style and their own ideas," Donna says.
***
THE FUTURE? Bill Marriott says there is a succession plan in place but that it's known to only a handful of people. There is much speculation that the company's chief financial officer, Arne Sorenson, will eventually replace Marriott as CEO, with John Marriott as chairman of the board.
Sorenson, the son of a Midwestern Lutheran minister, started at Marriott as a corporate lawyer, then worked on mergers and development deals before becoming chief financial officer and head of European lodging operations.
Asked about the possibility that he could become the first non-Marriott to lead the company, Sorenson says what one would expect him to say: He's happy in his job. He's concentrating on doing it well.
Bill Marriott isn't going anywhere.
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