Marriott International Inc. yesterday reported record earnings and named a 22-year company veteran as its president and chief operating officer, a likely heir apparent to succeed Marriott-family control of the world's largest hotel operator.
William J. Shaw's elevation to the newly created position as No. 2 executive sets the stage for an eventual transition at the top of Marriott, which has been led by a family member with the last name of Marriott since the company's founding in 1927.
In the interim, J. W. Marriott Jr. will continue as chairman and chief executive officer, and he said he has no plans to retire.
"I will be 65 in March, and it is important to our shareholders and associates that we prepare for the next generation of corporate leadership," Marriott said.
He added that, as the company -- which had revenues last year of more than $10 billion for the first time -- continues to grow, Marriott should broaden the responsibilities of senior management.
Marriott generated a 24 percent jump in net income last year, to a record $306 million.
Sales for the fiscal year ended Jan. 3 totaled $10.2 billion, a 14 percent gain from the year before.
In the fourth quarter of 1996, Marriott posted earnings of $110 million, a 22 percent increase from the comparable period in 1995. Revenues for the quarter were $3.44 billion, up 18 percent.
"This was an outstanding year for our lodging operations," J. W. Marriott said in a statement. "All our brands posted excellent results due to a combination of high occupancy levels, substantial room-rate growth and expanded distribution. In addition, our contract services group achieved solid increases in sales and profits in 1996."
In addition to the healthy hotel dynamics, Marriott added 148 properties totaling 10,000 rooms to its portfolio.
At year-end, the portfolio stood at nearly 1,200 hotels containing 227,000 rooms, under brand names such as Ritz-Carlton, Courtyard, Fairfield Inns and Suites and Residence Inn.
"For a company this big and stable to post a net income gain of 24 percent is remarkable," said Camille E. Humphries, a lodging industry analyst at Alex. Brown & Sons Inc.
As of March 31, Shaw will be responsible for lodging operations and the company's services group, as well as its architecture and construction, business information systems and human resources departments.
Shaw, 51, is an executive vice president and has been president of Marriott Services Group since 1991. He is a former Marriott chief financial officer and has served on its executive committee for the past nine years.
"He's steeped in the Marriott culture, and he's certainly an impressive leader with a strong financial background," Humphries said.
Marriott selected Shaw over three other candidates, all of whom are Marriott executive vice presidents, company analysts said. Notably, Shaw was selected over Executive Vice President William R. Tiefel, who is in charge of Marriott's lodging operations. Marriott did not respond to inquiries regarding Tiefel, although at 62 he is much closer in age to J. W. Marriott than is Shaw.
J. W. Marriott's sons, John and Stephen, 36 and 38 years old, respectively, also work for the company, as does Ron Harrison, a son-in-law.
John Marriott is regional vice president of the company's mid-Atlantic lodging operations, while Stephen Marriott works as vice president of corporate marketing. Harrison, 41, is vice president of reservations for Marriott's lodging division.
Pub Date: 2/07/97