When incoming Marriott International CEO Arne M. Sorenson visited a Fort Lauderdale, Fla., Marriott recently, the bellman congratulated him on his new job. “And then he started to laugh,” Sorenson says, the kind of laugh, he adds, suggested “Good luck. You’ll need it.”
Sorenson, who takes the reins at the end of March, is only the third CEO in the company’s 85-year history—and the first who isn’t named Marriott. He comes to the job after a brutal decade for travel.
Tourism in the U.S. still hasn’t rebounded to pre-9/11 levels. Before then, the total U.S. share of the worldwide travel market was 17 percent. It’s now 12 percent. If the U.S. had the same share now as it did then, he says, it would translate into 500,000 more jobs.
Marriott has taken its share of hits, too. Occupancy rates that plummeted after the financial crisis have rebounded to pre-2007 levels, but room rates are down “probably 5 percent to 10 percent in most markets,” so profitability levels haven’t fully recovered, he says. The company’s timing in some markets has been painful. It opened a luxury hotel in Tripoli a year ago, just before the Arab Spring protests erupted, and had to close it six weeks later. In 2007 it announced an unlikely partnership with Studio 54 co-owner turned hotelier Ian Schrager to create Edition, a collection of hip hotels that Schrager said could number more than 100. The financial crisis hit just months later. Marriott currently operates only one, with seven more in the works.
Sorenson is focusing on visa reform to help boost international tourism to the U.S. Long visa wait times in the wake of 9/11 are a major reason international travel to the U.S. hasn’t rebounded. Chinese travelers, for example, have had to wait as long as 100 days for a U.S. visa, prompting many to go elsewhere, in particular Europe, he says. Yet Sorensen estimates China will send 100 million travelers to foreign countries in the next three to four years—up from only 1 million a few years ago. If the U.S. could grab just 10 percent of that, he says, it would work out to 14 nights for every one of the nearly 5 million hotel rooms in the country.
Sorensen says he’s been frustrated that “this gets bollixed up in U.S. politics.” But he is more hopeful now that President Obama is starting to demand visa reform as well: “We’re finally getting some resonance on this.”