WASHINGTON — As John W. Marriott III wound his way through the cavernous kitchen of the Wardman Park Marriott hotel here, he reached out to shake hands with every employee and to exchange some banter.
The workers, preparing an evening reception for 700 people attending a conference, put aside the salmon hors d'oeuvres and cheese platters and greeted Marriott, the third generation of the Marriott International hotel business, and perhaps the empire's future boss.
Succession speculation at the company was stoked in January, when it promoted Marriott, the son of the company's current chairman and chief executive, J.W. Marriott Jr.
John Marriott, as the son is known, is now in charge of global sales and marketing, as well as managing Marriott's nine hotel brands and its North American lodging operations. The day his new duties were announced, the company, based in Bethesda, Md., also expanded the job of the chief financial officer, Arne M. Sorenson, to include hotel operations in Continental Europe.
The promotions fanned conjecture over who will eventually run Marriott, one of the world's largest hotel companies. It operates eight hotel chains on behalf of various owners, including the Marriott, Ritz-Carlton and Renaissance hotels, offering different levels of service and prices. The company reported $19 billion in overall sales last year from managing 2,500 hotels in 65 countries.
With his gold-plated name, his all-American good looks and a quarter-century in the family business, Marriott, 41, would seem to be a perfect fit for his father's shoes.
Not so fast, though, says his father, who is known as Bill. At 70, Bill Marriott keeps a vigorous pace, visiting 200 hotels a year. Interviewed recently in his office, he said he had no plans to step down. "I'm still having fun," he said, and he emphasized that there was no shoo-in for leading the company in the future.
"I will be able to say who I think is best," he said. "But the board will have to approve it. This is a big, complex company, and we've got to have the best talent."
Like other hotel companies, Marriott is struggling with tumbling occupancy rates, a result of the fragile economy and travel anxieties from terrorism and the war in Iraq. In the fourth quarter last year, Marriott lost $37 million, an improvement from a $116 million loss in the same period of 2001; the company's numbers had been hurt by the effects of the Sept. 11, 2001, terror attacks. For all of 2002, the company had net income of $277 million, up $41 million from 2001; revenue rose to $8.44 billion from $7.79 billion.
In February, Marriott lowered its 2003 earnings outlook because the war and the soft economy had crimped business and leisure travel. Executives at Marriott say it is well positioned to recover its core clients — corporate travelers — when the economy improves. But other troubles loom.
Several hotel owners have sued Marriott, contending that the company and its hotel supply purchasing firm, Avendra, improperly pocketed vendor rebates. Both companies deny the accusations. Two suits were dropped and was one settled out of court, but uncertainty about the remaining lawsuits, including one filed this month, has been a drag on Marriott's stock ratings.
After the suits were filed, a new openness emerged in what many had considered a closed, even secretive culture at Marriott, which was founded in 1927 as a family business. That year, J. Willard and Alice Marriott left Utah for the nation's capital, banking on humid summer weather as being ideal for selling root beer. In 1957, the company opened its first motel, the Twin Bridges Motor Hotel, in Arlington, Va.
In the early 1980s, Marriott began switching to managing and franchising its hotel brands, and it sold many hotel properties to private investors through limited partnerships.
Although John Marriott, who joined the Marriott board last year, may appear to have an inside track to lead the company, analysts do not discount Sorenson, 44, a lawyer whom Bill Marriott hired from the Washington office of Latham & Watkins.
Mark Falcone, who follows Marriott for Deutsche Bank, said the latest appointment "positions Arne well to move up in the company by giving him operating experience." But, he added, "I don't see it as a rivalry. There is definitely room for both of them in the next leadership tier."
John Marriott discounted the succession issue. "I've been asked that since I was in high school," he said. "I've always said that I don't know. Our family owns a lot of stock, and our wealth is tied up in the company, so I want it to do well. If I'm running the company, great. If somebody else is, that's great, too."
John Marriott said he was convinced that there could be only one person at the top. "You need a leader," he said. "Otherwise, who do you answer to?"
It would be hard for any outsider to compete with his experience. Marriott, who exudes the family's trademark wholesomeness, got his start in the business at 15, washing dishes at the Crystal City Marriott in Arlington.
He has a special connection, however, to the Wardman Park, a 1,900-room hotel on the National Register of Historic Places. Five years ago, when he was in charge of Marriott's mid-Atlantic region, he became interested in operating the hotel when he learned that John Hancock Financial Services, which owned the property, wanted to change managers.
Marriott initially lost the bid to manage the hotel, but John Marriott still wanted the prize. For weeks, he called the key executive at Hancock, and when she finally answered her own phone, he persuaded her to visit his hotels in Washington so "she could see firsthand how passionate we are about the hotel business." Finally, early on a Saturday morning, she agreed to sign with Marriott.
"By 11 a.m. that morning, I was there with my team and we ran the place for a month until managers were hired," said Marriott, grinning boyishly. "We had phones and walkie-talkies because the place was so big we kept getting lost and we couldn't find anything."
Over the years, he has done "nearly every job in the hotel business," including heading JWM Family Enterprises, a limited partnership that owns nine Marriott-managed hotels. His own family includes his wife, Angela, and their three daughters.
"Seeing the hotel business from the owner side has been a fantastic learning experience," he said. It was also a leap from earlier jobs as an ice cream scooper and a short-order cook, which, he said, is "a challenge when you are juggling 15 orders."
He owns a 1964 Corvette, which he drove across the country to the University of Utah to earn an accounting degree. After his freshman year, he spent two years as an LDS missionary in Tokyo, learning Japanese along the way. "We stood outside train stations and on the street," he recalled. "The Japanese were pretty open to it, and I baptized about 100 people while I was there."