Marriott to shuffle its holdings

The luxury Ritz-Carlton hotel chain will cease to be a stand-alone division under the Marriott International umbrella as part of a reorganization that the Bethesda-based company plans to complete by 2011.

Marriott, the largest hotelier in the United States, until now has kept a firewall between its eponymous chain of mid-priced hotels and Ritz-Carlton, which is the company's high-end attraction.

Company executives have said over the past few weeks that it was reorganizing into four units divided along geographic lines -- the Americas, Europe, the Middle East and Asia -- each with its own president and resources.

Marriott's current divisions are U.S. and Canadian operations, global timeshare, international and Ritz-Carlton. Global timeshare will continue to be outside the four regional units.

Marriott spokesman Tom Marder said Wednesday that the restructuring "enhances operations and connections to customers."

In a recent interview with Travel Weekly, Marriott President Arne Sorenson said the move was designed to decentralize the corporate structure and allow the regional presidents to "have the resources necessary to make decisions and so those decisions can be faster, more efficient, more local."

"The number of jobs lost will not be very large," Sorenson told Travel Weekly. As far as the effect on Ritz-Carlton, Sorenson told Travel Weekly "the front of the house will still be very much a Ritz-Carlton brand experience." The company has said it will not move Ritz-Carlton's headquarters from its current location in Chevy Chase, Md.

Analyst John Arabia of Green Street Advisors, said the reorganization made sense.

"It represents the fact that over the past several years, the Middle East and Asia are much larger pieces of the Marriott business and offer great opportunities going forward," Arabia said. "It allows decision-making in the field."

Marriott, with 3,200 properties worldwide, has been facing the same recession headwinds as the rest of the lodging industry.

The company recorded a third-quarter loss of $466 million, compared with a profit of $94 million one year ago. Excluding the pre-tax write-down of $752 million in its timeshare sector and other special items, Marriott posted third-quarter net income of $53 million. That's less than half of what the company earned excluding one-time charges in the same quarter of 2008.

Earlier this month, Marriott announced it was launching a new brand called the Autograph Collection, aimed at tapping customers who prefer independent, high-end hotels.

The Autograph Collection will allow independent hotels, many of which have lost business in the recession, to maintain their character while using Marriott's economies of scale to bring in more customers and save on costs. The new hotels in the Autograph Collection will operate as franchises.