Marriott International Division Commentary + Q&A
Amy McPherson: President and Managing Director, Europe
- Have 179 hotels in Europe:
- 49% Marriott
- 23% Courtyards
- 18% Renaissance
- 5% Ritz
- Over the last few years, new openings in Europe have shifted towards branded from independent brands
- As of 2009, only 30% of hotels were branded
- 2005-2007 openings: 52% branded
- 2008-2010E opening: 61% branded
- European travel spend was $1.34BN in 09 vs. $1.15BN for NA
- 70% of MAR guests in Europe are European (mostly from UK, Germany and France)
- European contribution to other regions:
- NA: 2%
- Caribbean & LATAM: 5%
- ME&A: 34%
- Asia Pacific: 10%
- Marriott is the 10th largest hotel company in Europe with 40,258 rooms – Accor is #1 with 247,603 rooms as of June 2010.
- 6% of branded supply
- Just renovated 32 hotels in Europe
- UK, Germany, and France generate 65% of their revenues in Europe
- House profit margins in Europe are expected to be 35% higher than peak levels in 2007
- Have centralized service centers across Europe to drive efficiencies
- Expect to double their portfolio in Europe by 2015:
- Autograph
- Courtyard and FS expansion
- Using MAR capital to acquire strategically located hotels or chain acquisitions
- AC hotels
- AC hotels:
- 3rd largest brand in Spain
- 92 hotels (9,500 rooms) located primarily in Spain (10 in Italy and 2 in Portugal)
- At closing will bump them to #5 in Europe
- Expect 60-61,000 rooms by 2013 with 48,000-49,000 organic additions from the 41,000 rooms at YE 2010E
Simon Cooper: President and Managing Director, Asia Pacific
- Have 2.4MM rooms in Asia Pacific, 65% of which are independent, 27% are chain managed and 8% are franchised
- Of the 647,000 rooms that are chain managed
- Marriott has 6% share
- Of the 647,000 rooms that are chain managed
- Source of Asia Pacific room nights:
- 58% Asia Pacific
- 29% NA
- 10% Europe
- China is the fastest growing market with 58MM inbound travelers
- China is spending $117/per capita on infrastructure spend vs. $17 in India
- Rail and low cost carriers are creating a new market of leisure travelers
- Courtyard is full service in Asia
- Signed a new agreement with Ctrip (China’s largest online travel agency with over 60% market share) to partner with Marriott Rewards this morning
Paul Foskey: Executive VP International Development, Asia Pacific
- Grew from 35,110 rooms in 2007 to 47,000 at 2010E YE
- All managed
- 47,000 room distribution:
- 46%: China
- 15%: SE Asia
- 12%: Indochina
- 12%: Japan & S. Korea
- 7% Pacific
- 47,000 room distribution:
- 30%: Marriott
- 24%: Renaissance
- 15%: Courtyard
- 14%: JW Marriott
- 13%: Ritz
- Signed pipeline: 17,000 rooms
- 43%: China
- 5%: SE Asia
- 39%: Indian subcontinent
- 13% Indochina
- 17,000 room distribution:
- 30%: Marriott
- 14%: Renaissance
- 25%: Courtyard
- 20%: JW Marriott
- 8%: Ritz
- Marriott is ranked 4th in open rooms in China and really focus on the gateway and primary cities (18.5k rooms)
- Projecting that their rooms will generate $1BN in 2010, the same as IHG’s 45k rooms in China – since non gateway cities have very little pricing power
- So Marriott captures 20% of the revenues with only 15% of the supply vs (AC, HLT, H, IHT, HOT, and Shangri-la)
- In India, wealth is much more geographically distributed
- Only 107k rooms
- Mostly new
- Less rate disparity between primary and secondary cities
- Marriott has 2,737 rooms in India – all managed (2nd largest western brand)
- Goal to launch 75 Fairfield units in 10 years. Also potential for Autograph.
- Expect to have 72-74,000 rooms in Asia Pacific by 2013, of which 62,000-64,000 are included in their 3 year plan
- 50% of MAR’s fee revenue in the region comes from outside of India and China