Page 84 - Forbes - USA (November 2019)

sound decisions,” Sorenson says.
The Starwood deal proved to be a game changer, deci-
sively vaulting the company past Hilton. Just over half of
Marriott’s 7,100 hotels are franchised, meaning owners pay
4% to 6% of each hotel’s room revenue (plus an extra 2% to JUST 100
3% of food and beverage sales) to use the Marriott name,
loyalty program and customer service. The remainder of its
hotels pay extra for the privilege of having Marriott manage
80 their property. If the managed properties outperform, Mar-
riott takes another cut. For hotels in Asia and Latin Amer- SHAREHOLDER RETURNS MEAN NOTHING
ica, that amounts to around 7% to 9% of profit. For U.S. IF A COMPANY’S WORKERS, CUSTOMERS,
0 COMMUNITIES AND ENVIRONMENTS AREN’T
0 properties it manages, Marriott pays a guaranteed sum to
1 CONSIDERED TOO. THAT’S THE REASONING
the hotel owner first and then takes as much as 25% of its
T UNDERLYING THE THIRD ANNUAL JUST 100,
S remaining cash flow. (Marriott avoids the pitfalls of taking OUR RANKING OF AMERICA’S BEST CORPORATE
U
J on too much real estate: It owns only 14 properties world- CITIZENS WITH OUR RESEARCH PARTNER JUST

E wide and leases another 49.) CAPITAL. OF THE 922 LARGEST PUBLICLY TRADED
H COMPANIES IN THE U.S., THESE NAMES SET THE
T “The deep dark secret is he is a deal junkie. He loves deals,
STANDARD IN STAKEHOLDER TREATMENT.
— and he loves winning competitive deals,” says Tony Capua-

T EDITED BY MAGGIE MCGRATH
S no, Marriott’s chief global development officer. “Two thou-
I
L sand eighteen was the seventh straight year of record deal

E production for the company, and I don’t think it’s any co-
H
T incidence that that sort of lines up with the time that Arne
TREATMENT
has been CEO.” ENVIRONMENTAL SHAREHOLDER
Sorenson’s best idea to tie it all together so far is Marriott WORKER TREATMENT CUSTOMER TREATMENT COMMUNITY TREATMENT TREATMENT
Bonvoy, a loyalty program, meant to draw in frequent trav-
elers and reward them for staying at Marriott’s 30 brands.
Company CEO = INDUSTRY LEADER
The program is popular: Bonvoy members booked around
50% of Marriott’s hotel nights last year. “The rewards pro- 1. Microsoft SATYA NADELLA
gram, based on dollars spent, already delivers about a 6%- 3 3 13 9 38
to-7% return when the points are redeemed, better than a
lot of credit card returns,” Sorenson says. 2. Nvidia JENSEN HUANG
The more customers stay at Marriott chains like Aloft 1 312 158 15 58
Hotels—or use their reward points on other stuff like rental 3. Apple TIM COOK
cars or a soon-to-launch Ritz-Carlton cruise line—the more
78 1 6 2 347
property developers want to put the Marriott name on their
hotels. Today around 20% of new hotel rooms being built 4. Intel ROBERT SWAN
around the globe are Marriott. “It just keeps feeding on it- 37 5 19 4 36
self. The bigger you are, the better your opportunity is going 5. Salesforce MARC BENIOFF
to be,” says Wes Golladay, an analyst with RBC. 2 213 111 49 221
One ongoing concern: Travelers who book stays through
Expedia or Kayak generate less revenue for Marriott and 6. Alphabet LARRY PAGE
don’t feed its Bonvoy flywheel. So far, these booking-site chal- 9 15 27 8 480
lenges have been manageable, but Sorenson is wary about
7. Anthem GAIL BOUDREAUX
what will happen if Google or Amazon gets into the game.
33 141 36 101 2
“When Amazon surfaced, what I convinced myself was
that we’re in a different place from retail, generally, because 8. PayPal DAN SCHULMAN
you can’t ship a night’s stay to somebody in a box,” Sorenson 6 12 225 92 219
says. But now “it’s clear that it’s not enough of a defense.”
9. P&G DAVID TAYLOR
His strategy is to bulk up: “I want to be as big as possible.”
19 13 155 44 23
As Sorenson deals with his cancer treatments, his team
has taken some meetings off his calendar. But that’s only 10. VMware PAT GELSINGER
freed up time for the master dealmaker to make his next 4 71 304 10 610
move. On a sticky summer morning in Washington, D.C.,
11. Cisco CHUCK ROBBINS
Sorenson surveys the nation’s capital from the rooftop
lounge of the W Hotel on 15th Street. He points out the 13 116 106 48 220
Washington Monument and the White House. Asked how 12. Intuit SASAN GOODARZI
many Marriotts he can count in the city skyline as he looks 7 418 125 28 311
out, Sorenson simply grins and says: “Not enough.”

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