Ritz-Carlton's Cooper On Marriott Restructuring
Travel Weekly’s Jeri Clausing broke a story on November 16 about Marriott International restructuring its hotel business into four regional divisions around the world, which will lead to “significant reshuffling” yet “not very large” job losses, according to Marriott President Arne Sorenson.
Sorenson told Travel Weekly this decentralization, which won’t be finalized until the beginning of 2011, will streamline corporate structure and allow each regional office to operate more independently and more agilely take key decisions.
What was a bit more loosely defined in the story was how the Ritz-Carlton brand — which has operated relatively autonomously from other Marriott brands and will still keep its own headquarters in Chevy Chase, Maryland — will operate under this structure. One thing the story made clear was that the luxury brand will lose its svp of sales and marketing, Bruce Himelstein—who many in the industry considered an integral component to Ritz-Carlton’s success.
What is not changing at the moment is top leadership at Ritz-Carlton as Simon Cooper will remain as president. I sent a quick e-mail to Simon to get some further clarification on the changes and their impact on Ritz-Carlton. Here is what he had to say:
HOTELS: Can you offer me the good, bad and indifferent as it pertains to Ritz-Carlton and this restructuring news?
Cooper: "The Good: Many key leaders have greatly broadened their responsibilities in the new organization (e.g. Ritz-Carlton brand leader now heads all luxury brands for Marriott, including Ritz-Carlton, Edition and JW Marriott). The Bad: I cannot comment but can certainly say that the challenge for me and my team is to safeguard the service culture that is such a defining factor of Ritz-Carlton’s success while accessing a robust global organization that will be providing global functional support. The Indifferent: Nothing is indifferent at Ritz-Carlton!"
HOTELS: Can you offer any details on how this will streamline back-of-house operations?
Cooper: "A great example would be Loss Prevention (Security). We had a single individual responsible for all our hotels in a world that is increasingly hazardous. We are now served by a network of 13 Loss Prevention leaders around the world who are fully integrated with our hotel teams and obviously able to respond more quickly to incidents and able to visit our hotels more frequently."
HOTELS: How much autonomy will you continue to have under the new structure that still gives you a separate building to operate from but now under four different theaters of operation?
Cooper: "In the new structure, Marriott is decentralizing operations and on each continent Ritz-Carlton will have regional leaders (area vice presidents) who report back to the global COO based in Chevy Chase, who has responsibility and accountability for Ritz-Carlton’s worldwide operations."
It will be interesting to watch this shift at Marriott—a major move by the man who now seems to be running the show—Arne Sorenson. No doubt, there were some financial considerations taken into account here and who could blame any hospitality company for reconsidering its operating platforms in times like these.
I am not quite sure how this makes Marriott more global as I think its brands already have strong global recognition, but if this gives leadership teams in regional theaters more freedom to act and react to market conditions, this should bode well for the bottom line in the long run. What do you think?
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