Good morning,
“This building has lots of unique features to it. But one of the things I do love is, at the end of the day, I’ll come down to the lobby, the lights are dim, and I stand in front of the 20-foot-tall digital wall while waiting to go down into the parking garage. It’s typically showing a beautiful landscape of some sort, a place in the world that you can travel to. It’s really a lovely way to end my workday.”
That’s what Leeny Oberg, EVP and CFO at Marriott International, told me during our talk at the hotel industry giant’s new global headquarters in Bethesda, Maryland. At the time, the ultra-high-resolution video wall, which changes multiple times a day, featured photography of pyramids in Egypt. The new $600 million campus is a 21-story, 785,000-square-foot, LEEDv4 Gold-certified building that first opened in September.
With high ceilings, floor-to-ceiling windows, and sleek decor, it certainly isn't the typical type of office building. And with a cafeteria that looks like a restaurant, an 11,000-square-foot childcare center, lactation rooms, a fitness center, and 7,600 square feet of outdoor garden space, among other amenities, I had to remind myself that I wasn’t in a hotel. (There’s an actual new Marriott hotel on campus next door, however.)
"Pretty much everything in this building, and every decision, was all about how to make our people love where they come to work,” Oberg says. For example, each associate workstation comes with a view outside with natural light, a sit-stand desk and an ergonomic chair, and mixed-seating collaboration stations line the windows on each work floor. There's also an Innovation and Design Lab, and test kitchen.
(You can see Fortune's tour of the new headquarters here.)
It’s certainly a change from Marriott's former headquarters they occupied since the 1970s. “It was state of the art at the time,” Oberg says. “But by the time we moved out, it was very much what I would call ‘old school.’ Gone are the offices where you can tell what level a person is by counting ceiling tiles. My office is now exactly the same size as anybody else's."
There are 5,000 associates assigned to headquarters, according to Marriott. The company has a hybrid work policy. “We encourage folks to come in for in-person meetings, but there is a lot of flexibility,” Oberg explains. “I would say Tuesdays and Wednesdays we’ve gotten up toward 60% of the headquarters-based team being around. Thursdays are a near follow. Fridays are clearly much quieter, and Mondays can vary.” Oberg says that 25% of the building is collaboration space because “we very often have lots of people coming in, like associates for training, and outside service providers who need to meet with us.”
Business model
Oberg has been CFO at Marriott since 2016, and before that, had several roles in finance, including CFO of Marriott-owned Ritz-Carlton. Oberg took on the additional role of EVP of development in February, tasked with the strategic growth of the company’s lodging brands. I asked for her perspective on real estate, given that many companies are cutting back.
“The business model of not being the owner of large office buildings matches our asset-light business model as a company,” Oberg says. “Out of our 8,300 hotels, we only own or lease 1% of them.” The new headquarters is a “built-to-suit building where we're the sole long-term tenant,” she explains. “We looked around the area and chose a place, and then began working with the owner of the land and real estate partners to build the building.” It was a six-year project, Oberg says. “Other offices that the company has around the world are also office leases, but nowhere near as big as this one. None of them are ones that we actually own outright.”
Buoyed by a post-pandemic resurgence in travel, Marriott reported in February a net income of $673 million in the fourth quarter of 2022, compared to $468 million the same time the year prior, and revenue per available room was up 28.8%. Marriott expects worldwide revenue per available room to grow 30% to 32% in the first quarter and 6% to 11% for the full-year 2023. The company will report first quarter 2023 earnings results on May 2.
Also post-pandemic, the hospitality industry has dealt with labor shortages. To retain talent at Marriott hotels, Oberg says efforts the company has made include reinstituting its employee stock purchase plan, increasing match on retirement accounts, and adding more flexibility in work schedules.
So what's Oberg's favorite Marriott location? She answered diplomatically: "My favorite one is my next trip," she says.
Sheryl Estrada
sheryl.estrada@fortune.com
