Marriott expands in Toronto, Canada
 

Marriott betting big on Toronto area
Hotel chain planning to build six suburban projects from scratch


By Tony Wong
Toronto Star Business Reporter

BORIS SPREMO/TORONTO STAR
VIP LOUNGING: J. W. Marriott Jr., chairman of Marriott International Inc., tests a hotel lounge while in Toronto yesterday to open the Courtyard hotel.
J. W. Marriott Jr. walks through the marble lobby of the downtown hotel that bears his name.

Smiling and shaking hands with staff, Marriott is given the reverence only someone who is used to having his surname plastered in giant-sized letters on buildings can understand. He does not want for service.

That seems to extend to anyone who happens to be in the vicinity of the hotel magnate. On entering the lobby, a visitor to the Toronto Eaton Centre Marriott is greeted by a sea of smiles. Staff members jockey furiously to take your coat, to get coffee, to validate your parking.

``I guess they do tend to be more on their toes when I'm here,'' chuckles Marriott, the 67-year-old chairman of Marriott International Inc., in an interview with The Star.

--------------------------------------------------------------------------------
`We are extremely interested and very serious about seeing a Ritz-Carlton here. There's already one in Montreal and we don't see why not Toronto . . . . We're very committed to Canada and the market is absolutely right.'

- J. W. Marriott Jr.
--------------------------------------------------------------------------------



That morning, Marriott had performed his dreaded trademark kitchen tour of the property and pronounced, to the relief of the manager and kitchen staff, that all was well.
``I have no illusions. They're always slapping a coat of paint on something, so it doesn't hurt to see for yourself,'' Marriott says.

Yesterday, Marriott was in town to open his new Courtyard by Marriott Hotel on Yonge St., formerly the Howard Johnson Plaza Hotel, which recently underwent $45 million in renovations. The 575-room hotel is the largest of the 150 Courtyard brand hotels in the Marriott empire. The purchase and renovation are just one of many aggressive moves by Marriott in the Canadian market this year.

Last week the company announced that the SkyDome Hotel, formerly run by Canadian Pacific Hotels, had become the Toronto Renaissance at SkyDome.

Next month, after a $5 million facelift, the Radisson Plaza Hotel Toronto will be officially opened as the Toronto Marriott Bloor-Yorkville.

The company also announced plans yesterday to build six new hotels from scratch in the Greater Toronto area. Two will be in Mississauga, one in Vaughan and three in Markham. All are expected to be open by 2001. Another six hotels are in the planning stage for north of Markham, Oakville, Brampton and the airport area.

Yesterday, Marriott attributed the aggressive growth to the rapidly improving Canadian economy and an increase in tourist and business traffic.

``We're very committed to Canada and the market is absolutely right,'' Marriott says.

Last June the company formed Marriott Lodging Canada as a new division of Marriott International, installing Simon Cooper, the former head of Delta Hotels and Resorts, at the helm. The move signalled that the company was serious about Canada.

Yesterday, Marriott revealed that he would also like to see the company's Ritz-Carlton chain open a five-star luxury hotel in Toronto.

``We are extremely interested and very serious about seeing a Ritz-Carlton here. There's already one in Montreal and we don't see why not Toronto,'' Marriott says.

Earlier this year, sources say, Marriott was seriously looking at the Park Plaza Hotel on Bloor St., but was outbid by the Hyatt chain.

``Toronto still has room for another five-star hotel. The market is still under-serviced,'' Marriott says.

Yet despite all the talk of expansion, with 1,810 hotels under Marriott management or ownership, the chain is already expanding so quickly that Marriott, who has a hands-on style of leadership, hasn't had time to see them all.

``There are four in Russia that I'd love to see, but I haven't had the opportunity,'' he says.

The son of Marriott Corp. founder J. Willard Marriott was born in Washington in 1932.

His father got his start in business with a root beer stand ``with nine stools,'' Marriott says. The business grew to offer hot dogs and chili and became a chain of popular restaurants called Hot Shoppes. His father branched out by investing in a motor hotel in Arlington, Va.

After graduating with a degree in banking and finance from the University of Utah, Marriott didn't immediately join the family business. Instead, he spent two years in the U.S. Navy as a ships supply officer on an aircraft carrier.

After leaving the navy, Marriott took over management of the motor hotel, becoming president of the company in 1964. The public company now has $8 billion (U.S.) in sales annually.

One way Marriott has managed to expand the company is by offering accommodation in a variety of price ranges. The Courtyard Marriott, for example, will offer rooms ranging from $129 to $159 a night, compared to $200 for the Marriott Eaton Centre.

According to figures by hotel consulting company HVS International, downtown Toronto hotel room rates jumped 10 per cent to an average of $111 in August from $101 the year before. In 1991, an average room in downtown Toronto would have cost $54.

Marriott opted to stay in a $350-a-night suite at the Eaton Centre hotel rather than trying out his new Courtyard hotel yesterday.

--------------------------------------------------------------------------------
Former Howard Johnson becomes Courtyard

--------------------------------------------------------------------------------



``This feels like home to me. I stay here every time I'm in Toronto,'' Marriott says.
If he had stayed at the Courtyard, Marriott would have seen a remarkable transformation from what it once was.

``The old Howard Johnson hotel was an old, tired hotel that needed some serious work,'' says William Stone, managing director of Colliers International Hotel Realty, which monitors the industry. The new building is a vast improvement over the old, with a sparkling marble lobby and pristine carpeting. The exterior concrete facade, while still not especially street-friendly, is at least clean and new.

Highgate Holdings Inc. of Irving, Texas, the property's current owner, bought it for an estimated $14 million two years ago and negotiated with Marriott to manage it.

Known as the Westbury before it was converted to a Howard Johnson in 1991, the hotel was placed in receivership in September, 1992, a victim of the recession that crushed Toronto's property market.

Stone says the presence of Marriott means more competition in a market that is seeing positive growth this year.

``Hotel operators obviously see a lot of life in the Greater Toronto market, especially with such a healthy economy,'' Stone says.

Last week Accor Economy Lodging, the largest owner and operator of economy lodging in the United States, announced plans to spend $100 million in the Greater Toronto Area over the next three years, building at least 10 of its Motel 6 and Studio 6 motels.

As early as next year, four Greater Toronto Area properties are scheduled to open, with Motel 6 motels in Burlington, Whitby and Brampton, and a Studio 6 motel in Mississauga.

But Stone noted that while there will be significant building in the 905 region, which is experiencing tremendous growth both in the office and residential markets, there is little new supply planned for the downtown core.

The only ``new'' hotels are refurbished ones, which include the Park Hyatt, the Marriott Courtyard, the Windsor Arms and the Marriott-Yorkville.

``The growth does seem to be happening outside in the suburban core,'' Stone says.

One of the reasons there is little building downtown is that costs and risk are higher, so financing is more difficult to get, says Stone.

Meanwhile, Marriott says with three new Marriott hotels in the downtown core this year and plans to build in the suburbs, he isn't looking to build downtown in the immediate future. But that could change.

``We're always looking. You never know,'' he says.