Is this a real rumor? Hotel management to Marriott?

[TiggerBouncy]

A friend told me that there was news Iger wanted to turn over management of all Disney hotels including DVC to Marriott or maybe Hilton and get out of the hotel management business.

I don’t see anything obvious about this on google so I’m inclined to chalk it up as made up. However figured I would ask the brain trust. Has anyone else heard this?

 

[Mle8308]

Is your friend a bus driver? If not, ignore!

 

[Jrb1979]

A friend told me that there was news Iger wanted to turn over management of all Disney hotels including DVC to Marriott or maybe Hilton and get out of the hotel management business.

I don’t see anything obvious about this on google so I’m inclined to chalk it up as made up. However figured I would ask the brain trust. Has anyone else heard this?

I haven't heard of it but I could see why he would want to. It's how Universal is set up.

 

[LSUmiss]

I wouldn’t mind this actually. Not sure about DVC but I think I would prefer this with the regular hotels.

 

[DL1WDW2]

Disney will outsource anything and everything… but I have not heard this rumor.
Maybe?

 

[lowlight]

Isn't Marriott a franchiser? How would that work?

 

[reddog21]

Isn't Marriott a franchiser? How would that work?

Like almost every franchisor they run and own around 20-30% of there hotels and franchise the rest.

I'm sure this may just be a rumor but I don't see it as a terrible idea. They moved on from managing there golf courses.

 

[kanerf]

Hilton and perhaps Marriot as well split their timeshare operations away from the hotel operations quite a while ago.

 

[wkrainey]

Not going to happen. Hotels are huge money makers for the resort. $183 average nightly rate at All Star Movies (cheapest in the parks). WDW has a conservative estimate of 25,000 rooms. If they're at 90% capacity that's $4,575,000 a night on the low end of income. There is no way Disney is giving up that income and outsourcing managment.

 

[MartyParty]

I could see it happening. Marriott has a pool of staff around the greater Orlando area. Services could bounce between Disney and Marriott properties. Disney would retain ownership of the hotels, guest services, profits, etc. with Marriott taking on the services at cost plus a fee. Would get Disney out of the managing hotel resources business which is big business across all of Florida.

 

[DLgal]

It would actually be a smart idea.

Imagine being able to earn rewards with your Disney stays...and redeem Marriott points at WDW resorts.

The Swan/Dolphin are already there. It would make sense.

 

[RivShore]

I think this rumor pops up every few years, and it's usually Marriott since they have the Swan/Dolphin relationship already.

Hmmm...I wonder if the timing of this rumor recirculating has anything to do with union contract negotiations?? They are currently deep into those negotiations....

 

[wkrainey]

I could see it happening. Marriott has a pool of staff around the greater Orlando area. Services could bounce between Disney and Marriott properties. Disney would retain ownership of the hotels, guest services, profits, etc. with Marriott taking on the services at cost plus a fee. Would get Disney out of the managing hotel resources business which is big business across all of Florida.

That's the rub though, Disney can staff the hotels with CPs from a fraction of the cost Marriott can. Neither side wins in this situation and Marriott is not in a position to staff 25 hotels that quickly. Beyond that you've got the unions you're dealing with as well. As others have said this sounds like a rumor due to contract negotiations vs anything that has serious weight.

 

[KYMickey]

The same murky amount many years ago when they built the Swan and the Dolphin. It really makes sense on many levels. It wouldn't surprise me in the least.

 

[DodgerGirl]

When you look at the general picture in top hotel chains Marriott is number one and they have been for years known as one of the top hotel chains second and third to Hilton and Hyatt but what makes Marriott so successful is the fact that you get excellent service and a marvelous price on their rooms. And with the many spin-off hotels that Marriott has such as Fairfield Inn Residence Inn Towne Place Suites Springhill Suites and Courtyard you can see why Marriott has become so big in hotels. But as far as Marriott wants to take over management of all the Disney resorts it simply will never ever happen in the future because with Disney resorts you get great service and a clean comfortable room at a reasonable price. The only hotels that Disney doesn't own and which is where they had the dream of wishing to be managed by Marriott is The Walt Disney World Swan and Dolphin which when the Swan was opened in 1989 and the Dolphin was open in 1990 they were owned by Westin who Marriott also owns and you can tell the difference between Westin and Marriott very much. But when it comes to hotel chains especially ones like Best Western Ramada Howard Johnson Red Lion Hotels nobody will compare to Disney resorts because with Disney resorts you get a lot for your money and if Marriott managed them the resorts would go downhill but as I mentioned this will never ever happen in Disney's history

 

[reddog21]

Not going to happen. Hotels are huge money makers for the resort. $183 average nightly rate at All Star Movies (cheapest in the parks). WDW has a conservative estimate of 25,000 rooms. If they're at 90% capacity that's $4,575,000 a night on the low end of income. There is no way Disney is giving up that income and outsourcing managment.

With that number comes all the cost/maintenance/aggravation to run said hotel or you could get 10-20% of that number and ultimately do nothing. Why do you think property management companies or franchising even exist? It's a way a company can make money without doing any work.

 

[TiggerBouncy]

Not going to happen. Hotels are huge money makers for the resort. $183 average nightly rate at All Star Movies (cheapest in the parks). WDW has a conservative estimate of 25,000 rooms. If they're at 90% capacity that's $4,575,000 a night on the low end of income. There is no way Disney is giving up that income and outsourcing managment.

I don't think anyone is suggesting Disney sell off the hotels or the profit therein. We're talking the day-to-day management of them. Disney already pays an expense for that. It just outsourcing those expenses to someone who does it for a living.

It would not be that outlandish an idea. DVC resorts are already managed by DVCM, a separate for-profit company.

I mean, it's not that I think it could not happen, or would be a terrible idea. I just did not find anything concrete to even suggest this rumor, but the person I was speaking to made it sound like it was all over the papers and going through final negotiations. Which I found odd since I would have expected something that far along would have come across my radar.

 

[reddog21]

I don't think anyone is suggesting Disney sell off the hotels or the profit therein. We're talking the day-to-day management of them. Disney already pays an expense for that. It just outsourcing those expenses to someone who does it for a living.

It would not be that outlandish an idea. DVC resorts are already managed by DVCM, a separate for-profit company.

I mean, it's not that I think it could not happen, or would be a terrible idea. I just did not find anything concrete to even suggest this rumor, but the person I was speaking to made it sound like it was all over the papers and going through final negotiations. Which I found odd since I would have expected something that far along would have come across my radar.

Exactly, it's no different then the golf courses. Disney still owns all the golf courses on DisneyWorld property there just run by Arnold Palmer Golf Management. Disney isn't in the golf business so you offload the day to day operations to a company that is. Personally I don't find it any different playing now then when Disney ran it.

 

[Mackenzie Click-Mickelson]

People might get a better hotel experience if someone else in the hotel industry took over. I could see perhaps a downside with maybe entertainment options available that people would be used to with Disney but things like security checks, housekeeping, etc would likely improve with someone else doing it.

 

[Mackenzie Click-Mickelson]

Not going to happen. Hotels are huge money makers for the resort. $183 average nightly rate at All Star Movies (cheapest in the parks). WDW has a conservative estimate of 25,000 rooms. If they're at 90% capacity that's $4,575,000 a night on the low end of income. There is no way Disney is giving up that income and outsourcing managment.

That's the rub though, Disney can staff the hotels with CPs from a fraction of the cost Marriott can. Neither side wins in this situation and Marriott is not in a position to staff 25 hotels that quickly. Beyond that you've got the unions you're dealing with as well. As others have said this sounds like a rumor due to contract negotiations vs anything that has serious weight.

The issue actually is that Disney can't staff the hotels well enough, well namely housekeeping but still. It would actually probably benefit Disney to let someone else staff the hotels and let them shift people over to other areas.

I don't know what Universal's arrangement is with respects to profits on the hotel side but their arrangement seems to be working quite well for them enough for them to continue doing it.