Word: marriott
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Dole vs. Couric. Chicken George and Butt Man. Bob Woodward reporting that Hillary communes with Eleanor Roosevelt, and a former FBI man claiming (without evidence) that Bill sneaks out to the Marriott for trysts. The political silly season is upon us--a patch of especially funky Washington weather that is spreading nationwide and reminding Americans why they hate politics. Every election year has one of these strange spells, which always combine high dudgeon and low farce: politicians trading blows over trivial issues while important concerns get reduced to the level of cartoon. What makes this season stand out, however...
...Indeed, there's barely a major hotel company that doesn't bear his imprint. "He is the best in the hotel business," says Bjorn Hanson, head of hotel-industry practice at Coopers & Lybrand, an accounting and consulting firm. "He has demonstrated that in what he has done with Disney, Marriott and Trump. He's done something different from what anyone expected. It's just sort of a Midas touch...
...money. Says he: "Honestly, it doesn't make sense to spend $1 billion to build two cruise ships that can be capitalized [paid for] in 120 days." Making shrewd use of capital is Bollenbach's forte. In 1993 he fashioned an elegant solution to quite a different problem: saving Marriott Corp. from collapsing in debt by splitting it into two companies. In 1989, as CFO of Holiday Corp., he helped launch a subsidiary that is now the Promus Hotel Corp. (Hampton Inn, Embassy Suites), in the process selling off Holiday Inns to Bass PLC for an outrageous amount of money...
That's how Marriott got into trouble. The company built hotels, sold them to investors and took back lucrative management contracts. Even if the hotel lost money--and many did--Marriott still made out. But by the late '80s the real estate industry came crashing down. Marriott and other companies, as well as real estate investment trusts, or REITs, were stuck with dozens of properties that couldn't be unloaded. The industry racked up losses of some $5.7 billion in 1990, or about $1,800 a room. By 1991 new construction virtually stopped...
Nowadays, Marriott and the rest of the industry are luxuriating in an occupancy rate that averages about 66% nationally, up from about 60% in 1991. At the same time, the occupancy level at which a hotel typically breaks even has fallen, from 67% to 62.5%. That's because hard times forced the industry to figure out how to do more with less. For instance, last year the industry employed 81 workers for every 100 rooms, according to Hanson of Coopers & Lybrand, down from 87.5 in 1987. You may not have noticed, because hotels did it by cutting back on costly...