Marriott International Aims to Draw a Younger Crowd

“This is what I know, but I’m the past,” he said, sitting in the old-fashioned floral splendor of a Grosvenor corner suite. Edition, conceived in partnership with the boutique hotelier Ian Schrager, is about the Marriott company’s future. “We’re trying to get some flash,” Mr. Marriott said. He rose wearily from his chair. “I’m off to see the flash.”

Marriott is big. The company, based in Bethesda, Md., operates 660,000 rooms under 16 brands, including Courtyard, Renaissance and Ritz-Carlton; more than 800 new Marriott-operated properties are in the works worldwide.

Marriott is dependable. When you’re stranded overnight on business in St. Louis or Denver or Chicago, the red glow of a Marriott sign is there at the airport to offer you a clean, comfortable room.

Marriott, in the words of brand experts, is boring. Nobody raves about the D.J. at a Courtyard.

So how do you recast this company as cool and current — a “brand constellation” of everything from standard-issue roadside rooms to six-star oceanfront suites? This is Arne M. Sorenson’s conundrum. Mr. Sorenson, 54, took over as chief executive in 2012, when Mr. Marriott stepped aside after 40 years on the job. Making this task trickier is the fact that Mr. Sorenson is the first C.E.O. in the company’s history who isn’t a member of the Marriott family. It’s his job to change the business while remaining reverential to J.W., who created the Marriott image and whose family still owns 25 percent of its stock.

It’s no easy puzzle, but Marriott, the world’s No. 3 hotel company by number of rooms, must quickly solve it to compete for younger hotel guests, Mr. Sorenson says. One indication of the urgency: Marriott expects more globally minded millennial consumers, also referred to as Generation Y or people born roughly between 1980 and 2000, to account for a third of business-room nights in the United States by 2020.

“We have to be as strong with the X’s and Y’s as we are with the boomers,” Mr. Sorenson said in November. “I don’t think any of the big brands in the hotel space have really won them over.”

Lodging analysts agree. But everyone is certainly giving it their best, from the sprawling InterContinental Hotels & Resorts, the No. 1 company and the owner of Holiday Inn and others, to Hilton Hotels & Resorts, the No. 2 company, which in mid-December executed a $2.35 billion initial public offering. To win over younger business travelers — and, even more important, to keep them in the Marriott fold when they travel for leisure, particularly overseas — the energetic Mr. Sorenson is relying on a range of strategies.

Core hotels are getting gussied up. In September, the Chicago Marriott O’Hare unveiled $40 million worth of improvements, including a better bar, historically a Marriott weakness. (Some analysts trace that to the company’s Mormon roots.) The Detroit Marriott at the Renaissance Center begins a similar $30 million upgrade in February. The company has been trying to improve what it calls the “guest-room beauty experience” at Marriott-brand hotels — stocking bathrooms, for instance, with a Thai skin care line.

A new ad push, “Travel Brilliantly,” estimated to cost roughly $90 million over three years, reflects Mr. Sorenson’s focus on younger consumers. TV and web ads, taped at international resorts like the Bangkok Marriott Hotel Sukhumvit, intone: “This is not a hotel. It’s an idea that travel should be brilliant. The promise of spaces as expansive as your imagination.” Marriott also offers Xplor, a free smartphone app combining reservations with games; players win loyalty club points by completing challenges at virtual hotels.

“We want people to be saying, ‘Hey, do you see what Marriott just did?’ ” Mr. Sorenson said.

Tina Edmundson, Marriott’s global brand officer for luxury and lifestyle hotels, added: “This company can be very humble, almost to its detriment. It hasn’t been important to say, ‘Hey, look at me.’ Some competitors are very good at that.”

Mr. Sorenson is also leaning harder on a part of the company that many consumers may not realize is owned by Marriott: Ritz-Carlton. Marriott bought 49 percent of that luxury hotel chain in 1995 and the balance in 1998. But Marriott — agreeing with Ritz-Carlton that the luxury brand would be hurt by association with Marriott’s middle-market brand — kept the connection quiet.

Now, with Ritz-Carlton delivering some of Marriott’s biggest growth — 30 new Ritz-Carlton hotels will open worldwide in the next five years, expanding the chain by 40 percent — Mr. Sorenson says he thinks it’s time to tear down the wall. “In 10 years of talking to Ritz-Carlton customers, never once has someone said, ‘Oh, yuck — Marriott,’ ” he said. “We now think all of our brands get stronger, including Ritz-Carlton, when people understand the breadth of our portfolio.”

Wealth Matters: Younger Generations’ Approach to Investing

The reports by Fidelity, U.S. Trust and Pershing show how the younger generations want to set themselves apart from the baby boomers. The reports yielded tips from which any generation could benefit but also contained some red flags indicating where the younger generations could stumble in the future from the same traits that seem like strengths today.

“When I was 25 years old, I wanted to emulate my parents,” said Craig D. Pfeiffer, a former vice chairman of Morgan Stanley and the founder and chief executive of Advisors Ahead, which trains advisers to work with younger clients. “I can remember proudly telling my father that I opened an account at a national financial services firm. When we wanted to buy our first home, we sought out our parents’ real estate agent. Today there is great pride in saying ‘I don’t have an account where you have one, and I’m proud that I’m not doing what you did.’ ”

That’s all well and good — and youthful rebellion is to be expected — but the decisions chronicled in these reports will affect the financial success of these generations for years. While some choices seem to be positive, others are going to take more time to play out. Here’s a look at some of the more interesting findings.

HAVING A SAY Fidelity’s Millionaire Outlook found that Gen X and Gen Y were deeply engaged in managing their money, though that engagement was not necessarily paired with a deep knowledge of investing.

The report said that nearly three-quarters of the young millionaires surveyed said they felt knowledgeable about investing, found it enjoyable and were actively involved in it. Yet that group also reported making 30 trades a month on average, meaning they may be less aware of fees and the risks of short-term speculation.

“Thirty a month is a big number,” said Bob Oros, executive vice president of Fidelity Institutional Wealth Services. “But I would look at it less as an absolute number. They’re actively engaged in how their assets are managed.”

Mr. Pfeiffer, who participated in the introduction of the Pershing report on the need to bring younger financial advisers into the advisory business, equated the heightened interest to the do-it-yourself movement in home repair. “They go to Home Depot and Lowe’s and try to fix it themselves,” he said. “Then they call the plumber to fix what they did. There is absolutely great risk around do-it-yourself.”

Rahul Shah, a founder of Peninsula Wealth in San Francisco said his clients broke down along generational lines and by wealth level. He said that Facebook employees with wealth exceeding $20 million had found advisers to help them manage the complexity, while those with a couple of million dollars were trying to figure it out themselves.

“There are a few who say, ‘Is there an app for this that can do this for me?’ ” he said. “Whether there is an app for that or not, everyone is going to behave emotionally when they’re managing their own money.” He said he would manage his client’s money better than his father’s money because he had an emotional attachment to his father’s money.

He added that many Google millionaires discovered this the hard way in 2008, when the financial markets collapsed four years after the company’s public offering.

SEEKING VALIDATION When Gen X and Gen Y investors ask for help, they want an adviser to collaborate with them and, in some cases, validate their decisions. The Fidelity report found that nearly all millionaires in this cohort worked with advisers — compared with just two-thirds of millionaire baby boomers — but that six in 10 said they used their adviser for a second opinion on investment decisions.

This article has been revised to reflect the following correction:

Correction: September 20, 2013

An earlier version of this article contained an incorrect photo credit. The photo is by Wendy Carlson, not Andrea Bruce.

European Automakers Hope Technology Can Lure Younger Buyers

With sales at their lowest level in two decades, auto industry managers gathering for the Frankfurt auto show next week will be doing their best to focus on shiny new technologies rather than on the European car market, which, in contrast to the thriving market in the United States, is in a terrible state.

The buzz at the show, which opens to the public on Wednesday, is likely to be about new battery-powered cars and vehicles that are able to drive themselves. Those are more cheerful topics than auto sales, which have fallen 20 percent in Western Europe since the financial crisis began in 2008 and are at their lowest level since 1993.

Only European carmakers with substantial sales in the United States or China — BMW, Mercedes and Volkswagen — have escaped relatively unscathed.

The emphasis on technology is more than just a distraction from market misery. Carmakers are desperate for ways to excite young buyers, who are increasingly apathetic about car ownership. The push toward cars that are rechargeable and loaded with software is part of a search to make automobiles as essential to young adults as smartphones. Otherwise, there is a big risk that auto sales may never reach their previous peaks even if the European economy keeps improving.

“There are products that are hipper for young people than cars,” said Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen in northern Germany and an industry analyst. “The car companies are still using the old marketing pitch — more horsepower. That doesn’t speak to young people any more.”

Interest in battery-powered cars has faded after disappointing initial sales, but it could pick up again this year with the market introduction of the BMW i3. The vehicle has perhaps the most revolutionary new design by an established carmaker in years, not only because of its electric propulsion system but also because the passenger compartment is made of carbon fiber rather than steel, to save weight and extend the distance the car can travel between charges.

There is also speculation that Continental, a German parts supplier, will announce an alliance with Google next week to further develop self-driving cars. A spokesman for Continental, which will hold a news conference at the auto show on Tuesday, declined to comment.

As such initiatives illustrate, it is no longer enough for a car to take a person from one place to another without breaking down. A car must be green, so the owner does not feel guilty driving it. And being in the car should not interrupt the perpetual connectivity that many younger people take for granted.

BMW is going to extremes to make the i3 the most carbon-neutral car on the road. A wind turbine outside the BMW factory in Leipzig provides power for the i3 assembly line, and the carbon fiber for the passenger compartment comes from a factory in Washington State that uses hydropower. And of course the i3 itself has no tailpipe emissions (unless buyers choose a range-extender version that has a small gasoline motor).

With a price of about $42,000 in the United States, the i3 will be an option only for higher-end buyers when it arrives in showrooms by the middle of next year, though government incentives could lower the price by more than $7,000. But since BMW’s clientele already tends to be wealthy and urban, the company may be in a better position than other carmakers to find a market.

“What the mobile phone did for communication, electric mobility will do for individual mobility,” Norbert Reithofer, the chief executive of BMW, said during an introduction event for the i3 in New York in July.

Despite Mr. Reithofer’s enthusiasm, no one expects battery-powered cars to sell in large numbers soon, and certainly not to solve the industry’s deep-seated problems. About 77,000 electric vehicles were sold in the United States in the last 12 months, far more than in any other country, according to Roland Berger Strategy Consultants in Munich. That number, which includes cars like the Chevy Volt that have range-extender motors, is tiny compared with the 14.5 million cars of all types sold in the United States last year.

Modest expectations may also be in order for self-driving cars. Cars are coming on the market that can relieve drivers of some of the tedium of driving in traffic or on the highway. The latest edition of the Mercedes-Benz S-Class, introduced this year, can steer and brake autonomously in traffic or on the autobahn.

Advertising: Longing to Stay Wanted, MTV Turns Its Attention to Younger Viewers

TRYING to win over a fickle teenager isn’t easy. Trying to win over millions of them every night is — as the kids say — cray cray.

But that’s exactly what MTV has had to do since its inception in the 1980s as the cable channel for disenchanted youth.

“Unlike other brands that get a lock on the audience and age with them, we have to shed our skin and reinvent ourselves,” said Stephen K. Friedman, president of MTV.

The channel is in the process of shedding its skin again, this time to appeal to viewers age 14 to 17 who have different preferences than the 18- to 25-year-olds who make up the older portion of the millennial generation (a cohort born roughly between 1981 and 2000 and also known as Generation Y or the Facebook Generation).

On Tuesday, MTV will introduce its latest deep dive into generational behavior: a nationwide study of 1,800 “young millennials.” The findings will be presented to marketers and MTV programmers to help show how the channel and its sponsors can speak to the younger end of the audience.

These younger viewers grew up looking up to Katniss Everdeen, the gritty heroine from “The Hunger Games,” rather than Harry Potter, the study says. Older millennials were told by their baby boomer parents that “they were special and gifted, with a magic wand capable of changing the world” and “the world is your oyster.” The Generation X parents who are raising this younger crop of millennials tell them “you have to create your own oyster,” the MTV study says.

Generational studies have been pivotal to MTV’s past success. Faced with double-digit declines in ratings in 2008, the channel embarked on an immense research project to try to understand the country’s roughly 80 million millennials and, in turn, to get them to want their MTV.

That study helped inform hits like “Jersey Shore” and “Teen Mom” and by 2010, ratings among MTV’s core audience of 12- to 34-year-olds had increased by 24 percent to 895,000 viewers, according to Nielsen.

“Candidly, we were hanging onto Gen Xers a little too long,” said Mr. Friedman, who called the 2008 research “a wake-up call.”

Last year, the average number of prime-time viewers age 12 to 34 fell 23 percent, to 834,000, compared with the same period a year earlier, according to Nielsen. (Jason Rzepka, senior vice president for brand communications and public affairs at MTV, pointed out that online streaming had affected nightly ratings, but that the channel remained the most watched basic cable channel among viewers 12 to 24.)

The new study, called “Young Millennials Will Keep Calm & Carry On,” comes at a turning point for MTV. “Jersey Shore,” the channel’s highest rated series ever, ended in December after six seasons. Around the same time, the channel began to notice shifts in behavior and tastes among younger viewers.

“Catfish: The TV Show,” a documentary series about online dating that had its premiere last year, emerged as a surprise hit with an average of 3.2 million viewers an episode and was the highest-rated premiere for an 11 p.m. series. MTV has attributed the show’s popularity, in part, to this younger demographic.

Alison Hillhouse, the vice president of MTV Insights who oversaw the study, said 14- to 17-year-olds were even more comfortable with social media and technology than their older siblings. She calls them “digital latchkey kids” because their hands-off Generation X parents have largely left them alone to navigate the Web.

Unlike the “Yes We Can” optimistic older millennials, this younger group of teenagers has a raised awareness of economic problems, MTV says.

“At age 13 they know they won’t find their dream job right away,” Ms. Hillhouse said. More than three-quarters of 14- to 17-year-olds interviewed said, “I worry about the negative impact that today’s economy will have on me or my future.”

Viacom, the parent company of MTV, is known for its in-depth audience research and for matching that research with marketers’ needs. MTV will take its latest findings to advertisers like Procter & Gamble, Unilever and Pepsi to help inform them about what type of ads will work on this more pragmatic group of teenagers.

“There’s always the research people at the table that helps us really ground the ideas in insight,” said Claudia Cahill, chief content officer at OMD, part of the Omnicom Media Group unit of the Omnicom Group. Ms. Cahill serves as the intermediary between MTV and brands like Pepsi, Hewlett-Packard and State Farm.

Research played a role in Pepsi’s “Live for Now” campaign on MTV and its sister channel, VH1, Ms. Cahill said.

“Marketers who aren’t of this generation have to use tactics to get these teenagers involved,” she said.

The trick for MTV will be to not rely too heavily on cultural anthropology. Skeptics of MTV’s approach say a research-based algorithm could never lead to the alchemy of Madonna in a conical bra, the couch-side cackles of “Beavis and Butt-head” or the first season of “The Real World,” when viewers got a first glimpse at “what happens when people stop being polite and start getting real.”

MTV will be taking its findings to writers and producers, but Mr. Friedman says he wants the findings to inform creators, rather than dictate what they create. Research, he says, is not brought into the development process until the channel tests pilots with focus groups.

“It’s a marriage of science and art, and you don’t want to underestimate the importance of the art,” Mr. Rzepka of MTV said.

Restaurant Chains Try to Woo a Younger Generation

For reasons as varied as the economic downturn and a heightened interest in local foods, a significant shift in eating patterns is under way among the millennials, those 18 to 30. Oddly, at least by historic trends, they are eating out less than the baby boomers did at that age. Many in the restaurant business worry that it may be impossible to reverse the decline, which affects 50 million to 60 million young people.

The statistics alone are stark. Restaurant visits among millennials have fallen 16 percent over the last four years, according to research by the NPD Group, a consumer marketing firm, and have failed to pick up as the economy has improved.

“The outlook for the restaurant industry over the next 10 years is dismal,” said Bonnie Riggs, a restaurant industry analyst at NPD.

Over all, sales are expected to grow less than 4 percent in the next decade, a troublesome projection for not only burger chains like McDonald’s but for the newer “fast-casual” dining businesses like Chipotle. McDonald’s stunned investors last month when it announced that its sales in stores open at least a year had fallen 1.2 percent after rising every quarter for almost the last decade.

And so far, restaurant chains have failed to benefit from the steady improvement in the overall economy.

“The informal eating out industry is either flat or declining in many markets around the world,” the chief executive of McDonald’s, Don Thompson, told investors last month.

It is true that restaurant chains like Chipotle, which has a devotion to explaining the origins of its ingredients that brings to mind the “Portlandia” sketch about a chicken dinner, and Subway, where customers plan their own sandwiches and watch them being assembled, are doing better among the millennials than traditional sit-down restaurants and fast-food chains.

But between the proliferation of artisanal food trucks and items like cupcakes made of Valrhona and Callebaut chocolates and topped with a fondant daisy for $2.75 at Georgetown Cupcake, or Fresh Direct’s offering of “heritage” pork from the Flying Pigs Farm in upstate New York, millennials tend to spend their dining dollars sparingly and in a more calculated way.

“This was the group hardest hit by the economic crisis, and there’s a debate right now about whether their purchasing behavior has changed fundamentally as a result,” said Tony Pace, chief marketing officer for Subway. “I think, personally, that there appears to be a structural change. There isn’t a single point — ta-da! — that points to it, but there are a lot of little things that do.”

Vera Chang, 26, who lives in Vermont, is one of those consumers who pays attention to the ingredients on the menu and the origins of the food they favor. She says she rarely eats at chain restaurants, finding places instead through Edible Communities, which gives advice on restaurants, chefs and food, or the local newspaper, which tells her about the chef and the provenance of the foods served.

“I like to know the story about the places I eat,” Ms. Chang said. “I think it’s key to feed one’s heart in addition to one’s stomach when going out.”

She said it was harder for chain restaurants to tell stories about the people behind the food they served and about themselves.

David Palmer, who follows the restaurant industry for UBS, underscored Ms. Chang’s points, noting how particular the younger clientele could be, especially during tough economic times. “The austere crowd has cut back, and pretty significantly,” Mr. Palmer said. “It’s partly that they’re economically challenged by the job market and student loans, but they also want authenticity in ingredients and the ability to customize meals in restaurants.”

According to NPD, it is not that millennials have abandoned fast food altogether: Hamburger chains like McDonald’s, Wendy’s and Burger King get nearly 28 percent of the millennials’ fast-service patronage. They just tend to eat there less often, or they have switched to newer burger places like Shake Shack, Mooyah, In-N-Out Burger and Smashburger.

This article has been revised to reflect the following correction:

Correction: June 7, 2013

An earlier version of this article misstated the surname of the chief executive of McDonald’s. He is Donald Thompson, not Donald Taylor.