Marriott looks to China to spur future growth

Leading global hotel operator Marriott International said earlier it is on track to have 4,000 hotels in 90 countries across its 14-brand lodging portfolio by 2014. With 115,000 hotel rooms in its development pipeline, it could open between 90,000 and 105,000 new rooms around the world in 2012 through 2014, not including the planned Gaylord acquisition. Marriott confirmed in May it plans to pay $210 million to acquire Gaylord Entertainment namesake hotel brand and management operations, expanding its group and meetings portfolio. In presentations at its first meeting in China for security analysts and institutional investors, Marriott said it expects to have more than 100 hotels across nine brands and nearly 40 markets in China by 2014. Assuming six to eight percent compound growth in worldwide systemwide Revenue per Available Room (RevPAR) for 2012 through 2014, diluted earnings per share (EPS) could reach $2.45 to $2.85 in 2014, Marriott said. Arne Sorenson, Marriott International’s president and chief executive officer, told investors: “China is a fitting place to present our tremendous global growth story and discuss our outstanding financial prospects. “Even today, China is our second most important market after North America, representing roughly five percent of total fees. “On average we expect to open a hotel a month in this country over the next three years. Marriott up following announcement “Beyond our major expansion here, China also represents extraordinary opportunities for the travel sector globally.   “The country is now the third largest source market for international travel behind the US and Germany, with 70 million travellers annually, fuelled by a dramatically growing middle class. “Chinese arrivals in the US were one million in 2011 and are expected to grow to three million by 2016. “We are working with our industry to smooth the visa process in the U.S. and we look forward to welcoming more visitors from around the world,” added Sorenson. Discussing its operating model, the company said it could generate between $1.8 billion and $1.9 billion in worldwide fee revenue through 2014, assuming compound worldwide systemwide RevPAR growth of six to eight per cent. Highlighting its commitment to and focus on the China market, Marriott confirmed it plans to hire 30,000 employees in the country by the end of 2015. The company now has one million Chinese members in its 38 million member guest loyalty program, Marriott Rewards, and has also established a fresh water conservation initiative, “Nobility of Nature,” in partnership with local communities in Sichuan Province.