Marriott Unveils Ambitious Growth Plan: 1,700 Hotels In 3 Years
Marriott International, already the largest hotel company in the world, said it will open more than 1,700 hotels worldwide over the next three years, totaling between 275,000 and 295,000 rooms.
That is a strong pace, but only somewhat faster than its growth in recent years. In 2017, the company added 386 hotels, and in 2018, it added 440. The company would add more than 500 properties annually for the next three years to make its new goal.
The Maryland-based hotelier has about 6,900 properties representing 30 different brands, including the luxury Ritz-Carlton and St. Regis, but also including newer ones aimed at younger travelers, such as Aloft and Moxy Hotels.
Activist investor Land & Buildings Investment Management, founded by Jonathan Litt, has reportedly criticized Marriott's 30 brands as too many, and said the hotel giant would do well to cull some of them to be more competitive.
The investor also criticized Marriott for mishandling its $13B acquisition of Starwood Hotels & Resorts, Reuters reports. Litt is well-known for agitating for change at real estate companies, and is seeking a seat on Marriott's board of directors, the Wall Street Journal reports.
Marriott contends that its array of brands is a strength, not a weakness.
In announcing its three-year plan, the company called its broad portfolio a "competitive advantage" that helps attract Gen X and millennial travelers in this country — who are looking for novel experiences — and a growing middle class in countries like China.
Marriott also asserts that demand will support hotel growth well into the 2020s. For example, personal and business travel spending in North America totaled $1.1 trillion in 2017. The World Travel & Tourism Council estimate estimates that spending will total $1.7 trillion by 2027.
Travel spending in the Asia-Pacific region, which totaled $2 trillion in 2017, is estimated to swell to $5.1 trillion by 2027. From China alone, outbound trips will grow from 57 million in 2010 to 160 million next year, according to consultancy McKinsey & Co.
Marriott’s three-year growth plan assumes, but doesn't forecast, comparable hotel revenue per available room growth of 1% to 3%, compounded annually.
PwC forecasts that RevPAR will grow 2.3% in the U.S. this year. Last year, U.S. hotels' RevPAR grew 2.9%.
