Marriott International expects its corporate negotiated rates will increase in the 6 percent to 8 percent range after negotiations this year, Marriott CFO Arne Sorenson said today in a conference call to investors.
The hotel company is now finalizing negotiations with corporate customers as property-level negotiations are just beginning, he said. Marriott's expectations are slightly above the overall expectations for 2008 corporate rates put out by PricewaterhouseCoopers
(BTN, Sept. 10).
Marriott announced its corporate rate expectations as it reported performance results for the third quarter of 2007. Compared with the same period in 2006, Marriott's net income was down about 15 percent to $122 million, which Marriott said was a result of higher taxes and a drop in timeshare profits. Worldwide revenue per available room increased by 7.7 percent for the quarter. North American RevPAR was up 7.2 percent, and international RevPAR was up 12.9 percent, boosted by a 10.8 percent increase in average daily rate.
Sorenson said group bookings also are strong into 2008. Marriott expects to open 30,000 rooms this year while removing 11,000, and it expects to add the same number in 2008 while removing only 5,000, according to Sorenson.