Marriott International is pushing up both corporate and
group hotel rates in North America and, despite industrywide hotel supply
growth in the region remaining below historical averages, Marriott executives
also say it still is a key market for new hotel development.
In the company's fourth-quarter earnings conference call on
Thursday, Marriott CFO Carl Berquist said that special corporate rate
negotiations for 2014 are "largely complete," with corporate rates at
comparable accounts up an average of 5 percent year over year in North America.
With demand expected to gain momentum throughout this year, Berquist said
Marriott plans to "further reduce discounting and drive rates higher."
Echoing what Hyatt and Starwood executives
said in their earnings calls a week prior, Berquist said group demand also is
strengthening at Marriott. Projected revenues from 2013 group sales for events
scheduled during the next five or six years increased by 7 percent compared
with 2012 bookings, he said. The overall group booking pace at the Marriott
brand for 2014 is running 4 percent higher than last year, and the corporate
group booking pace is up nearly 10 percent, which Berquist said was "very
encouraging, since corporate demand is short-term."
In the fourth quarter of 2013, the average daily rate on
group stays increased 3 percent year over year, he added.
Marriott's overall fourth-quarter ADR in North America
increased 3.3 percent to $135.99. Full-service ADR was up 3.8 percent to
$166.10, and limited-service ADR increased 2.5 percent to $113.21. ADR was up
across all brands, most significantly at Autograph Collection properties (up
13.5 percent to $224.57) and Ritz-Carlton (up 7.4 percent to $335.87).
North America fourth-quarter occupancy increased 0.8
percentage points year over year to 67.3 percent, and occupancy was up across
all brands except Marriott's extended-stay brands, where it dipped slightly.
For the full year, hotel revenue increases were particularly
strong in San Francisco, Houston and Miami, Berquist noted. They were weaker in
New York, in part because of tougher comparisons to the period in 2012
following Hurricane Sandy, and in Washington, D.C., due to government cutbacks,
he said.
Marriott president and CEO Arne Sorenson during the call
also reconfirmed plans to grow the hotel company's U.S. footprint. In 2013, the
company opened 15,000 new rooms in North America and was responsible for about
one in five rooms opened in the United States, Sorenson said. The company
largely is focusing on secondary markets, with about 70 percent of planned U.S.
development in areas outside of its largest 25 markets, he added.
"We would no sooner write off growth in the U.S. than
we would in China," Sorenson said. "We've got great years of growth
in the United States ahead of us."