Apr252010

Marriott International Grows, Rates Drop, and Guests Return in 2010

Marriott Hotels released 2010 first quarter financial results a few days ago. What I like about hotel quarterly financial reports is the ability to see how many hotels are currently in the chain and what has changed with room rates over the past year. The number of hotels in a hotel company is an important metric for loyalty travelers. The more hotel locations a chain has to offer frequent guests means the better opportunity to meet the traveler’s needs for paid room nights and award room nights. I particularly like to keep an eye on the full service Marriott Hotels, and the high end J.W. Marriott and Ritz-Carlton properties for nights using points.

Marriott had 3,457 properties as of March 26, 2010. This is 230 additional properties opened in the past year under Marriott brands. This is more than 7% expansion of the Marriott chain in the worst year of the hotel industry in decades. The strong hotel chains grow stronger in this weak travel environment. (Loyalty traveler note: there is a discrepancy of one hotel between Marriott’s financial report at 3,457 and the numbers in the table below at 3,456. I can’t figure out where the missing hotel is located. In the big picure this is not so big a discrepancy.)

Marriott International Hotels by Brand as of March 26, 2010

Rates have continued to drop and are significantly lower in 2010 than a year ago. Rates have dropped on average by 5% to 10% in the USA. Occupancy has actually picked up slightly. The luxury sector with Ritz-Carlton in the lead has seen the largest occupancy increases of any Marriott brand in the past year. The mid-scale and extended stay market segments show slower occupancy growth. Looks like the well-to-do guests are well-off again while frequent guests are returning back to mid-tier and extended stay travel more slowly.

Marriott’s domestic hotel performance lags behind the international hotel room rates and occupancy levels. Asia-Pacific has seen great occupancy growth. The USA has only seen a 3.0% occupancy increase over the past year and worldwide a 3.6% increase. Rates meanwhile have continued to drop and the average daily rate in the US is $120 compared to $165 international.

Marriott forecasts rate increases in 2010 as hotels attempt to push up average daily rates in the face of higher occupancy.

Marriott International Domestic and Regional Average Daily Rates and Occupancy

Source: http://investor.shareholder.com/mar/releasedetail.cfm?ReleaseID=462338

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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