Can Giants Share a Home?

Hilton's Move to the Washington Area Puts It Squarely in Marriott's Back Yard

For more than 50 years, Marriott International has been the region's premiere lodging company. Other firms have popped up around it, made their marks, built hotels across the world, but one name has reigned supreme.

That changed last week.

Hilton Hotels' announcement that it's relocating here from Beverly Hills brings another household name -- one dating back to 1919, well before Marriott entered the business -- to a region many say is now the lodging capital of the world. Hilton's plans sparked all sorts of chatter in the local business community, including speculation that the companies' intense rivalry will only sharpen now.

"They compete and they keep a close eye on each other," said Jim Dinegar, president of the Greater Washington Board of Trade. "Now they will be in each other's backyard. It will be fascinating to watch."

Both companies played down the competitive angle of the news. Christopher Nassetta, Hilton's chief executive, was previously head of Host Hotels and Resorts, a Bethesda company spun off by Marriott. Nassetta grew up in Arlington County and said he is close with Marriott family members and senior company officials, including chief financial officer Arne Sorenson.

"They are both the premiere lodging companies," said Thomas Baltimore, president of Bethesda lodging firm RLJ Hotels and a former executive at Hilton and Marriott. "It's clearly a respectful rivalry." Nassetta, for his part, said he was "confident there would be room for both us there going forward" and that "the more relevant fact is that we are both great companies."

But hotel industry observers said both companies clearly have competitive interests that will play out locally, ranging from attracting and retaining talent to quiet but persistent discussions over who is bigger and more dominant in the hotel industry. There is also competition brewing between state and local governments trying to influence Hilton's decision over where to locate. The company is considering suburban Maryland and Virginia, and has already been in discussions with Montgomery County officials.

Nassetta has said he has no plans to raid Marriott for talent, but the company has acknowledged that many employees in Beverly Hills may not want to move, meaning there could also be an immediate need for experienced replacements. Hilton listed the region's lodging know-how as a primary reason for the move.

"It will be interesting, won't it?" said Emily Durso, president of the Hotel Association of Washington. "I don't think some significant percent of Marriott employees are going to run over to Hilton, but there will be competition for top people, no doubt about it."

Dinegar, the trade board president, said he expected Hilton to go after not just Marriott employees but those at other lodging firms, such as Choice Hotels in Silver Spring. "I would be absolutely concerned if I am Marriott that there are not enough people to fill all of the jobs that Hilton would need," he said. "There will be a run on Marriott and Choice and also some of the bigger corporate real estate companies."

Marriott's response was simple: The company is a great place to work, they said. Executives point to the recent announcement by Fortune magazine that Marriot made its list of "100 Best Companies to Work For" for the 12th straight year.

"It was Bill Marriott's father who said take care of the associates and they'll take of our guests, and that's still our approach today," Marriott human resources chief David Rodriguez said in a statement. "We have a high level of engagement with our associates and continue to offer tremendous opportunities for career growth, even in an economy like this one."