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By Kent Larsen
Marriott, Bulgari Announce New Hotel Chain
WASHINGTON, DC -- The Marriott Corporation announced Tuesday that it had
reached an agreement to start a new hotel brand with the Italian luxury
goods maker. The joint venture calls for each company to invest up to $140
million in about a dozen 150 to 200-room Bulgari hotels over the next five
years. The chain will cater to 'movie stars and models' according to one
report.
While Bulgari will record the chain's sales on its books, Marriott Corp.
will run the hotels for a fee, like it does for many of the hotels in its
chain, most of which are owned by investors. The real estate for the hotels
will cost an estimated $800 million and will be leased from local partners.
The move represents the latest in the expansion of luxury brand names, and
Bulgari will be the first luxury brand to lend its name to hotels. In
keeping with the brand name, the 'super-deluxe' hotels will be thoroughly
Italian in style, including works of art, cuisine and design that fit the
brand name. Bulgari expects the hotels to enhance its brand name, instead of
detracting from it.
For Marriott, the move increases its presence in the luxury hotel market,
and in anticipation, it has formed a Luxury Group for its five-star brands,
including Ritz-Carlton in addition to the Bulgari properties. Marriott vice
chairman William R. Tiefel, who is also Chairman of Ritz-Carlton, will head
the new Luxury Group. He says that the two brands are quite different, with
Ritz-Carlton appealing to those that prefer tradition and refined elegance
combined with easy luxury. Bulgari, on the other hand, will appeal to those
looking for individualized, contemporary Italian style often associated with
movie stars and models.
Lehman Brothers hotel analyst Joyce Minor says that while there seems to be
a lot of luxury hotels, this brand certainly has a market niche that is not
served. "It's a brand that's going to appeal to the moneyed, beautiful
people crowd that tote Prada bags and wear Cartier watches. It's a small but
lucrative niche."
Marriott is a public company on the Mormon Stock Index that is still run by
its namesake Marriott family, including brothers J. Willard Marriott Jr.,
and Richard Marriott, both of whom are LDS Church members. The company also
recently announced that Fortune Magazine had named it the "Most Admired
Company" in the lodging industry. That award is on top of Fortune's
recognition of Marriott as one of the "100 Best Companies to Work For" last
year and its award as one of "America's 50 Best Companies for Minorities."
Sources:
Marriott, Bulgari plan super-high-end hotel chain
Reuters 13Feb01 B4
By Doug Young
Bulgari, Marriott to create deluxe hotel brand
Reuters 13Feb01 B4
By Trevor Datson: European Consumer Goods Correspondent
Marriott International Joins Bulgari to Launch New Luxury Hotel Brand
PRNewswire 13Feb01 B4
Fortune Names Marriott 'Most Admired Company' in the Lodging Industry
PRNewswire 9Feb01 B4
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