Marriott and Schrager to Develop Boutique Hotel Chain

Hotel group Marriott International is expected to announce Thursday that it is developing a boutique hotel chain with hotelier Ian Schrager, according to the Wall Street Journal. Financial terms were not disclosed. Schrager will design, market and brand the hotels and Marriott will operate them. The partnership is viewed by some as curious, since Marriott's conservative image -- typified by its flagship Ritz-Carlton -- differs from the "style-driven" approach Schrager has taken in his properties. The hotels will be owned by third parties who will pay fees to both Marriott and Schrager. Marriott plans to sign five hotel deals by the end of 2007 with an ultimate goal of 100 hotels under development around the world over the next decade. In the 1970s and 1980s, Schrager and then-business partner Steve Rubell ran New York nightclub Studio 54. He eventually served time for tax evasion. On his release, he opened stylish, upscale boutique hotels in New York, Miami and Los Angeles. "We just knew it was time for us to get into that space and we wanted to do it with somebody who really knows how it works," said Marriott Chairman and CEO J.W. "Bill" Marriott Jr.

Sources: Wall Street Journal, Reuters
Commentary: Eight Hotel Stocks To Watch This Summer • Cramer's Take on MAR
Stocks/ETFs to watch: Marriott International, Inc. (MAR). Competitors: Starwood Hotels & Resorts Worldwide, Inc. (HOT), Hilton Hotels Corp. (HLT), Intercontinental Hotels Group plc (IHG). ETFs: Consumer Discretionary SPDR ETF (XLY), PowerShares Dynamic Consumer Discretionary (PEZ), Vanguard Consumer Discretionary VIPERs (VCR)

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Comments

[LARRY OSSEI...:]

This partnership makes perfect sense. For years the industry has been wondering how Marriott was going 2 compete in this sector. Competing with chains like the W & Aloft, doing it themselves would have proven difficult for Marriott. As you stated this move is a bit of a stretch for Marriott, but if you are going to capture the 25-34 demo why not go to the architect of the boutique movement.

2007 Jun 14 08:43 AM

[Las Vegas N...:]

Great idea!

Mar 28 08:07 PM