Editor’s note: Sometimes being big can help a company weather what may come

October 14, 2012

One of my pet projects these days is trying to figure out how the local business community is responding to the threat of the impending fiscal cliff. You’d think from our perch in and around the nation’s capital we would have a pretty good feel for what might come.

Ha!

Just listen to what Arne M. Sorenson, chief executive of Bethesda-based Marriott International, told investors recently.

“Despite our just-outside-the-Beltway headquarters, we are by no means well positioned to opine on how our leaders in Washington are likely to deal with these complex issues. So as we consider 2013 today, let us assume that a solution to the fiscal cliff will be found.”

That’s looking at the glass half full. Sorenson then offered a glimpse of some of the levers a corporate giant can play in times of economic uncertainty.

For instance, the federal government has already decided to freeze the per diem rates it allows in 2013 as part of an effort to trim Uncle Sam’s travel budget.

“Fortunately, at many full-service hotels in the United States, business is strong enough that we will probably replace this government business with other customers paying higher rates.”

The end of the presidential election cycle should help as well. “In Washington, we expect occupancy rates to increase in 2013 as the politicians and lobbyists get back to the city.”

“And we anticipate the inauguration festivities will also drive results,” he said. Overall, revenue per available room for greater D.C. should grow at a mid-single-digit rate next year — an important consideration for a company with so many hotels here (roughly 5 percent of its rooms in North America).

Marriott has other tricks up its sleeve. It is betting it can boost margins at its newly acquired Gaylord conference centers by linking the brand to Marriott’s extensive marketing machinery, back office resources and customer network.

Turbulence may be coming. Sometimes, being big has its advantages.

Dan Beyers is the founding editor of Capital Business, The Washington Post’s go-to source for news about the region’s business community.
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