Marriott International launched "Managed by Marriott" (MxM), the new name and branded approach for Marriott’s hotel management organization, which will provide a complete hotel operating solution for owners of Marriott’s 19 lodging brands -- soon to be 30 with the addition of Starwood Hotels & Resorts Worldwide's portfolio later this year.
Managed by Marriott will operate nearly 700 hotels in the U.S. and Canada. According to Liam Brown, president, select-service & extended-stay - North America/lodging and development for Marriott International, the organization's goal is to maximize the financial performance of owners' hotels by focusing on three principles: Performance, people and partnership.
How will this affect third-party management groups affiliated with Marriott properties? "We are already in this space today," Brown said. "Forming Managed by Marriott allows us to clearly state what the organization is all about, and changes how we can articulate our goals to decision makers."
According to Brown, Marriott never initially planned for there to be a distinction between properties that the company built and companies the property managed, a divide that eventually grew over time. Now, with a significant management business under its belt, Brown said the company wanted to create MxM to better talk with associates and strengthen this business.
"We often have the question, 'Are you a management company or a franchise company?'" Brown said. "We are a brand company."
Brown said that Marriott doesn't have a number or quota in mind for the management side of its operations, but nearly every property outside of North America is already directly owned and managed by the company. As of Q2 2015, the company managed approximately 35 percent of its rooms in North America.
"As we grow the system, we have to grow both pieces," Brown said. "We have to focus on our strengths and ask whether or not it makes sense for a third party to manage hotels on a case-by-case basis. As a company, we are not interested in seeing our management footprint shrink. It makes us a better brand company to be in the management business because we then have skin in the game."
Marriott typically does not manage its smaller hotels in the U.S., a practice that is unlikely to change as a result of the MxM initiative. However, Brown says that MxM will serve to improve the way in which Marriott communicates with potential owners to earn more management opportunities.
"At the end of the day, whether an owner secures our brands or management depends on our ability to tell our story," Brown said. "We have compelling talent, the best people in the industry. This is an opportunity for us, with our associates and owners, to show who we are as a management company."