In preparation for MAR's 2Q earnings release tonight, we’ve put together the recent pertinent forward looking company commentary.



Marriott International Expands Group And Meetings Portfolio With Acquisition Of Gaylord Hotels Brand And Hotel Management Company For $210 Million (May 31, 2012)

  • The transaction will add 4 hotels and approximately 7,800 rooms to Marriott's portfolio.
  • MAR mgmt contract: initial term of 35 years
  • MAR expects to earn an incentive fee in its first full year of management, based on improvement in Gaylord Hotels' profitability, and expects the transaction to be accretive to Marriott's EPS by approximately 2 cents in 2013.   


  • 2012-2014 guidance
    • 2012-2014 Worldwide compound REVPAR 6-8% growth and +90k-105k gross room additions assumption (or Net rooms growth of 3.5% to 4.0%), excludes Gaylord transaction:
    • EBITDA CAGR: +15-19% growth ($1.51-1.66 billion)
    • EPS CAGR: +23-30% growth ($2.45-2.85)
    • FCF:  $1.8-2.0 billion
    • Diluted share count: 293-304 million
    • $1.8 billion and $1.9 billion in worldwide fee revenue through 2014
      • NA incentive mgmt fee: $145-165 million
      • International incentive mgmt fee: $210-240 million
    • Owned leased and other revenue: $165-195 million
    • G&A: $720 million
    • Investment spending of $2.6 billion to $2.8 billion (recycle $800 million to $1 billion of capital)
    • $4.0 billion to $4.7 billion to return to investors or deploy in additional opportunistic investments


    • Plans to hire 30,000 employees in the country by the end of 2015
    • Target Adjusted Debt/Adjusted EBITDAR of 3.0x to 3.25x
    • Marriott Great Room: full roll-out in 2013


  • "On average...about 40% of a full service hotel is group business. So that leaves 60% which is all transient driven, fairly short term in bookings, you're talking about days or a few weeks. You're not talking about months of advanced look."
  • "You can envision a world in which something happens in Europe, it's not good for the economy either there or in the United States and I think there's still significant slowdown that we could take before we had really problematic RevPAR performance." 


  • "In 2012, we expect worldwide system-wide RevPAR to increase 6% to 8%.  Our higher RevPAR expectations reflect stronger transient business and strong group bookings, particularly bookings at smaller hotels in the U.S. We expect total fee revenue to grow 9% to 12%."
  • "Our Great Room should be in two-thirds of our Marriott Renaissance Hotels by the end of 2012. And we expect three-quarters of our more than 800 domestic Courtyard Hotels will offer the new Courtyard Refreshing Business lobby by then as well."
  • "We expect supply growth to remain very low for a number of years, particularly in the full-service segments."
  • "We expect a modest pullback in supply growth as the Chinese government attempts to cool the hot residential real estate market. This will likely slow the extraordinary pace of new hotel deals and openings a bit. Despite this, we continue to expect China to remain one of the fastest growing lodging markets in the world. Among upper upscale and luxury hotels in Asia overall, we have a 10% share of operating rooms but a 15% share of rooms under construction."
  • "In Europe, we believe the supply growth will likely remain under 1% for the next few years. There we are pursuing conversions for our full-service brands including Autograph and we see great opportunities for ground up development of Courtyards and AC hotels as well."
  • "Booking pace for the Marriott brand for the remainder of 2012 is up over 11% compared to only 2% a year ago. And what we see underneath that 11% for the brand as a whole is something more like 16% to 17% growth in group bookings for the smaller hotels and high single digits for the largest convention hotels.  Attendance at group meetings is running ahead of expectations. A few meeting planners are complaining about the lack of available space for new bookings during peak times."
  • "RevPAR in the Middle East declined 6% in the quarter and while Egypt remains a challenging market, we
    expect easier comps as the year goes on."
  • "For the full year, we expect to open 25,000 to 30,000 rooms. We've seen some construction delays for ground up development in the Middle East and Asia. Conversions are taking a bit more time as many new Autograph hotels are undergoing renovations prior to opening. About half of our expected room openings in 2012 are outside the U.S."
  • [Incentive fee 2012 guidance] "The 20% is probably a good number for the full year and it will vary quarter-to-quarter."
  • "Rate growth is a mix of all prior bookings from all prior years. So while the rate growth for new bookings is better, maybe a bit – maybe something like double that 2% number when we look at the bookings that are being made today, the rate growth is still going to take a little while we come along just as the older business burns off."
  • "As we sit here today we would say – with one quarter in the bag, it makes us feel a bit more confident about the balance of the year in Europe, but we still are mindful of the fact that we have got weakness in provincial UK, which has been the case now for a year, a year-and-half. We've got anxiety in France, which is increasing; Spain is not strong and Southern Europe is not strong."
  • "We've got a decent distribution in Germany. The German economy is the strongest in the Western Europe anyway, but there are risks there and we will sort of watch them. I think the other bright spot over there and where we are quite strong is Russia and the East. We've got strong distribution of hotels there and I think we'd see by-and-large continued strong performance in those markets."
  • [Higher guidance for owned and leased segment] "It's primarily our leased hotels that are showing strength, and benefiting just from the RevPAR that we talked about in the manage and franchise side. The leased hotels are experiencing the same benefits.... I think the other thing in there is Tokyo, is coming on very strong. And last year, it's an easier comp."
  • [Weak Washington DC market] "Those conditions will continue through the balance of the year and as a consequence, we wouldn't sit here today and say that you should expect something meaningfully more positive in 2012....I think the group bookings in 2013 look reasonably good. So we would anticipate a better 2013 than 2012."

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