J.W. Marriott Jr., Chairman and CEO of Marriott International

This is a partial transcript from Your World with Neil Cavuto, November 11, 2003, that was edited for clarity.

Watch Your World w/Cavuto weekdays at 4 p.m. and 1 a.m. ET.

NEIL CAVUTO, HOST: Is business travel (search) picking up? My next guest says, you better believe it is. Take a look at his stock and you just might agree.

Marriott International is up close to 50 percent over the last year, and the company’s chairman and chief executive, J.W. Marriott Jr., says it’s only getting better. Bill Marriott, as he’s known, joins me right now.

Bill, good to have you.

J.W. "BILL" MARRIOTT JR., MARRIOTT INTERNATIONAL CHAIRMAN & CEO (MAR): Hi, Neil. Good to be here.

CAVUTO: Firing on all cylinders, huh? What does that say about the economy?

MARRIOTT: Well, the economy is getting much better.

CAVUTO: Where do you notice it the best?

MARRIOTT: Well, here in New York is strong. New York is getting better. We are very strong in the mid-Atlantic. The Caribbean has been very strong in the summer. Florida has been strong.

Americans are staying closer to home; they’re traveling more within the boundaries of the United States, more in the Caribbean. Leisure was great this summer, and we expect to have a great Christmas season here in New York.

CAVUTO: You are either a gutsy guy or a crazy guy, because it wasn’t too long after September 11th that you were saying, stick with New York, stick with downtown New York, and don’t fizzle and fade.

MARRIOTT: That’s right.

CAVUTO: Why?

MARRIOTT: Well, New York is a tremendous attraction. And now we are starting to see some international travel begin to come back, and that is a big deal.

CAVUTO: One of the things that is kind of interesting, you predicted that you will be seeing compound growth in the city of 17 to 22 percent for a long time, at least another few years. A lot of economists say that is being generous.

MARRIOTT: Well, we’re talking about 17 to 20 percent based on 17 percent with a 3 percent RevPAR, which is revenue per available room. And the 22 percent goes up if the RevPAR goes up more than that. But that is based on the fact that we have a lot of base fees that are going because we’ve had a lot of hotel rooms.

We’ll add 90,000 rooms in next three years. We’ve been adding 30,000 rooms a year even through the recession and after the September 11th situation. So we continue to be bullish about our pipeline of new rooms. We’re adding rooms outside of the United States, as well as domestically.

CAVUTO: I know you have a campaign now to say you can find the lowest price room via Marriott, and all these ancillary Web sites and all. I think this is a distinction. You don’t include Priceline or Hotwire.

But is it that a risky strategy? You get people into the rooms, but maybe potentially it is such a cut-rate cost that profits are razor-thin.

MARRIOTT: Well, what we call single-image inventory, we can get you the same price everywhere on every channel. Whether it is with travel agents, whether it’s with our own hotel, reservations systems, whether they call their own hotel direct or whether it’s on the Internet, the price will be the same. So we call it, best rate guarantee, meaning that everybody gets the same rate no matter where they call.

So you don’t have to be on the Internet for four hours trying find the best rate. Whoever you call you’re going to get the same rate.

CAVUTO: Bill, I talked to one hotel guy, not quite as big as you, who was saying, "You know, Neil, my one nightmare is we’re one terrorist act away from a disaster again." Is that the kind of precipice you are on, that it’s really just dependent on staying terrorist-incident-free?

MARRIOTT: Well, we certainly hope there aren’t going to be anymore terrorist attacks in this country. We are prepared, I think, as well as we can be. We’ve got tight security, particularly here in New York. And in our international properties around the world we’ve got tight security.

CAVUTO: But look around New York, Bill. I mean, they are not guarding the tunnels like they used to. I’m presuming they don’t have the manpower to keep it going. I’m being fair to New York here.

MARRIOTT: But I came into our hotel last night at the Marquis in New York, and our car -- our hotel car, and we stopped, they opened the trunk, they looked inside. So...

CAVUTO: Did they know who you were?

MARRIOTT: Oh, yes.

CAVUTO: Good. You probably would have fired them had they not done that, right? All right.

But, bottom line, when you see the convention business improving, when you see a lot of the special-type business being applied to the Ritz Carlton and high-end chain, you see this developing, and a good reflection on the economy?

MARRIOTT: We do. We see it beginning to come back. It takes usually...

CAVUTO: Because you know the Democratic candidates have come back at the president saying, it was a one-quarter blip, this 7.2 percent, the jobs gains have been mediocre at best, and they’re not going to be long-lived. So that the economy still stinks. What do you say?

MARRIOTT: I think they’re wrong. I think the economy is picking up. All the indicators are there. You know?

The unemployment is coming down, employment numbers are getting better. The first time that has turned in a long time. And we are starting to see manufacturing picking up.

People are buying more computers, more computer chips. You see some of the big chip-makers with their profits way up. So I think you are starting to see a roll here that people are -- companies have held back so long now that it’s time for them to start spending again.

They are making a lot of money. Their balance sheets are in good shape. And so I think it’s turned.

CAVUTO: All right. J.W. Marriott, Bill Marriott, thank you very much.

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