Marriott's Pipeline Hits Record High As It Adds Luxury, Midscale Hotels

The pandemic may have wreaked short-term havoc on the hotel sector, but it hasn’t interrupted Marriott International’s growth.

At a meeting with its investors this week, the hotel brand’s executives said that the company has been signing long-term contracts for luxury and midscale hotels since 2019. Marriott International has signed for more than 2,000 properties, spanning approximately 359,000 rooms, as part of an ongoing growth strategy, CoStar reported.

Marriott International has 547,000 rooms in its overall pipeline, a record high for the company, and roughly 44% of those are under construction, even as the financing environment has made development challenging. Conversions of hotels from other brands make up roughly 76% of the company's pipeline, including Marriott International’s partnership with MGM Resorts. 

The information was presented as Marriott International laid down its three-year growth strategy in Miami on Wednesday. The hotel company plans to add as many as 270,000 additional rooms over the next three years, resulting in an expansion of almost 1.8 million rooms before the end of 2025, according to a release. 

Marriott International’s efforts are already delivering results for its revenues, with executives touting fees per room $100 higher than the brand’s closest global competitor and $350 higher than its second-closest competitor, per CoStar.

“We expect to produce significant free cash flow and earnings growth over the next few years and create meaningful value for our shareholders,” Marriott International Chief Financial Officer Leeny Oberg said in a statement. 

The hotel company’s luxury brands — including its Fairfield Inn, TownePlace Suites and SpringHill Suites brands — have played a significant role in its expansion in North America, while soft brands including the Tribute Portfolio and the Autograph Collection have maintained momentum.

The company has also expanded to 12 new countries since 2019, bringing its global footprint to 139 countries. Its luxury portfolio is particularly prominent in markets outside of the U.S.: so far, 364,000 of the company’s 552,000 international rooms are in luxury-branded hotels. Marriott International also has 113,000 luxury rooms in its international pipeline, more than twice that of its closest competitor.

Marriott International also hopes to cultivate loyalty from Marriott Bonvoy members in midscale hotel markets, like its new U.S. extended-stay brand StudioRes or its Four Points Express by Sheraton brand in Europe, Africa and the Middle East.

“With global travel poised for continued robust growth, our strategy is to deliver the best brands and experiences for consumers, to attract and retain the most loyal guests and to be in more places around the world,” Marriott International President and CEO Anthony Capuano said in a statement. “I am incredibly optimistic about Marriott’s future.”