FORBES.COM NOVEMBER 30, 20 1980
THELIST—THE^JUST100sound 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
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
their property. If the managed properties outperform, Mar-
riott takes another cut. For hotels in Asia and Latin Amer-
ica, that amounts to around 7% to 9% of profit. For U.S.
properties it manages, Marriott pays a guaranteed sum to
the hotel owner first and then takes as much as 25% of its
remaining cash flow. (Marriott avoids the pitfalls of taking
on too much real estate: It owns only 14 properties world-
wide and leases another 49.)
“The deep dark secret is he is a deal junkie. He loves deals,
and he loves winning competitive deals,” says Tony Capua-
no, Marriott’s chief global development officer. “Two thou-
sand eighteen was the seventh straight year of record deal
production for the company, and I don’t think it’s any co-
incidence that that sort of lines up with the time that Arne
has been CEO.”
Sorenson’s best idea to tie it all together so far is Marriott
Bonvoy, a loyalty program, meant to draw in frequent trav-
elers and reward them for staying at Marriott’s 30 brands.
The program is popular: Bonvoy members booked around
50% of Marriott’s hotel nights last year. “The rewards pro-
gram, based on dollars spent, already delivers about a 6%-
to-7% return when the points are redeemed, better than a
lot of credit card returns,” Sorenson says.
The more customers stay at Marriott chains like Aloft
Hotels—or use their reward points on other stuff like rental
cars or a soon-to-launch Ritz-Carlton cruise line—the more
property developers want to put the Marriott name on their
hotels. Today around 20% of new hotel rooms being built
around the globe are Marriott. “It just keeps feeding on it-
self. The bigger you are, the better your opportunity is going
to be,” says Wes Golladay, an analyst with RBC.
One ongoing concern: Travelers who book stays through
Expedia or Kayak generate less revenue for Marriott and
don’t feed its Bonvoy flywheel. So far, these booking-site chal-
lenges have been manageable, but Sorenson is wary about
what will happen if Google or Amazon gets into the game.
“When Amazon surfaced, what I convinced myself was
that we’re in a different place from retail, generally, because
you can’t ship a night’s stay to somebody in a box,” Sorenson
says. But now “it’s clear that it’s not enough of a defense.”
His strategy is to bulk up: “I want to be as big as possible.”
As Sorenson deals with his cancer treatments, his team
has taken some meetings off his calendar. But that’s only
freed up time for the master dealmaker to make his next
move. On a sticky summer morning in Washington, D.C.,
Sorenson surveys the nation’s capital from the rooftop
lounge of the W Hotel on 15th Street. He points out the
Washington Monument and the White House. Asked how
many Marriotts he can count in the city skyline as he looks
out, Sorenson simply grins and says: “Not enough.”JUST 100
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WORKERTREATMENTCUSTOMERTREATMENTCOMMUNITYTREATMENTENVIRONMENTAL^TREATMENTSHAREHOLDER^TREATMENTCompany CEO = INDUSTRY LEADER