Marriott Reports Strong Corporate Demand, Higher Rates - Business Travel News

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Marriott Reports Strong Corporate Demand, Higher Rates

April 21, 2011 - 12:35 PM ET

By Michael B. Baker

Marriott International boosted rates during the first quarter of 2011 amid "very strong" corporate transient demand and "building" group demand.

First-quarter rates at Marriott International properties increased in North America by 2.4 percent year over year and by 5.9 percent outside of North America. Occupancy rose 2 percentage points in North America and 3 percentage points across all other regions, contributing to a revenue per available room increase of 5.8 percent in North America and 11.2 percent in the rest of the world. CFO Carl Berquist noted that corporate transient rate negotiations are now complete, with rate increases averaging in the high single digits, as projected.

"Marriott led the way on price increases in 2010," Berquist said during a conference call with investors. "Today, competitors are raising rates as well, so we are not overpriced."

Net income for the quarter was $101 million, up 22 percent from the first quarter of  2010.

Though Marriott noted group business during the quarter was weaker than expected, Berquist said the company viewed that as an anomaly, adding that group business on the books for the rest of the year so far is 10 percent higher than last year.

Marriott president and COO Arne Sorenson said group bookings are benefiting from the company's sales strategy, started in 2007, to move sales out of individual hotels and into regional centers that cross-sell across all Marriott brands. Most groups with 100 to 300 room nights now are booked via those centers, he said, noting that Marriott has regional sales offices covering most states and plans to complete the rollout this year.

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