Marriott International will open 1,700 new hotels worldwide over the next three years, it announced yesterday, which will add between 270,000 to 295,000 rooms to its inventory and generate, if all goes according to plan, an additional $400 million in revenue in 2021 and $700 million yearly once everything is settled.
“The company said it expects 44% of the net new rooms will be in North America, while the remaining 56% will be split evenly between its Asia Pacific and its Europe, the Middle East and Africa and the Caribbean and Latin America businesses,” the Wall Street Journal’s Allison Prang writes.
“The company credited its growth to a rich loyalty program, profitability of current hotels and range of brands by Marriott,” Holly Shively writes for the Dayton Daily News.
Ohio’s sixth largest city has already been a center of Marriott's expansive state of mind.
“The Fairfield Inn & Suites by Marriott that opened last fall near the Dayton Dragons Stadium was the first new hotel in downtown Dayton in decades. Since October, hundreds of new rooms have come online or been proposed for Dayton,” Shively reports.
“With its new growth, Marriott also expects investors to see a boost. The company says it could produce diluted earnings per share to $7.65 to $8.50 by 2021, and cash available for shareholders could total between $9.5 to $11 billion over the next three years,” Emily Price writes for Fortune.
The ambitious plans and upbeat outlook comes amid some turmoil for Bethesda, Md.-based Marriott, which owns the Ritz-Carlton and St. Regis brands among more than two dozen others.
“The Wall Street Journal reported last week that Land & Buildings Investment Management LLC was aiming to get a seat on Marriott’s board. The activist investor has a small stake in Marriott and is displeased with the company’s purchase of Starwood Hotels & Resorts Worldwide Inc.,” the WSJ’s Prang reports.
“People familiar with the matter said the Land & Buildings believes Marriott has too many brands in its portfolio and it didn’t effectively combine Starwood’s and Marriott’s rewards programs," she adds.
Arne Sorenson, Marriott president and CEO, has a different take.
“Starwood has made us a more formidable competitor, providing a more valuable loyalty program, brands with strong appeal to loyalty members and owners, talented associates, terrific locations, particularly in the fast-growing Asia Pacific region, significant cost synergies and meaningful scale. We launched our newly branded loyalty program, Marriott Bonvoy, just last month. The program reached 125 million members as of year-end 2018 adding roughly 50,000 members per day,” he says in the statement announcing the newest initiatives.
“Last year, Marriott disclosed it suffered a massive data breach that exposed the personal information of roughly 500 million of its guests. The hack was later linked to Chinese hackers, according to several reports. Marriott CEO Arne Sorenson later apologized for the breach before a U.S. Senate panel and vowed to protect against attacks in the future,” Jade Scipioni reminds us on FoxBusiness.com.
“The hackers accessed people's names, addresses, phone numbers, email addresses, passport numbers, dates of birth, gender, Starwood loyalty program account information, and reservation information,” Seena Gressin, an FTC attorney, wrote in a consumer report. “For some, they also stole payment card numbers and expiration dates. Marriott says the payment card numbers were encrypted, but it does not yet know if the hackers also stole the information needed to decrypt them,” Kevin Curran writes for TheStreet’s “Real Money.” ”
“The breach, which was once thought to be the second largest in history, was a persistent problem into year-end, attracting a great deal of negative attention to the company just as it was seeking to increase usage of its rewards programs. Interestingly, the stock has rebounded more than 20% from its lows as the company has worked to rectify the situation and clarify the extent to which it was infiltrated,” Curran adds.
Marriott, which held an investor conference Monday after releasing news of the forthcoming expansion, “expects comparable hotel revenue per available room (RevPAR) growth -- a key measure of hotel health -- between 1% and 3% per year for the three-year period. Last month, Marriott missed Wall Street estimates for fourth-quarter revenue and forecast a lower-than-expected full-year profit, blaming slowing demand in North America, its largest market,” Reuters' Sanjana Shivdas and Ankit Ajmera report.
But evidently not in Dayton.