Marriott International reported a strong uptick in
corporate-customer room sales during the fourth quarter, and CEO Arne Sorenson
expects business to be similarly strong in the year ahead.
"Make no mistake, business travelers are on the
road," Sorenson said during Marriott's fourth-quarter earnings call. While
the energy and manufacturing sectors were weak, the company saw significant
strength in technology, professional services, healthcare, pharmaceuticals,
automotive and media. "In fact, room sales from our nearly 300 largest
corporate customers increased 4 percent in the fourth quarter, 7 percent
excluding energy and manufacturing companies," he said.
Sorenson said Marriott's corporate customers expect to
travel "at least as much in 2016 as in 2015." With negotiations for
2016 nearly complete, he expects corporate pricing to increase at a
mid-single-digit rate.
The company also reported strong group business, as North
American group revenue for the fourth quarter increased 6 percent year over
year and attendance at meetings "exceeded expectations." New group
business booked during the fourth quarter for any future period increased 10
percent year over year, while full-year group revenue booking pace is up 7
percent. Sorenson said that with occupancy high and meeting space limited, groups
are booking earlier than in the past.
Results by the
Numbers
Marriott's systemwide occupancy reached 70 percent during
the quarter, up 0.4 percentage points year over year. Fourth-quarter average
daily rate was $151.49, up 3.2 percent from last year.
In North America, fourth-quarter occupancy hit 69.5 percent,
up 0.4 percentage points, while ADR was $147.31, up 3.3 percent. Houston,
limping along as energy prices remained low, saw an 8 percent year-over-year dip
in revenue per available room. New York City, too, saw a RevPAR decline of 1
percent, even as occupancy hovered at 88 percent. San Francisco saw RevPAR
moderate a bit, increasing 6 percent during the quarter as high prices
"detoured some guests," Sorenson said.
For the year, systemwide occupancy increased 0.8 percentage
points to 73.7 percent, and ADR increased 4.1 percent to $152.30. Full-year
North American occupancy reached 73.9 percent, up 0.5 percentage points, and
ADR climbed 4.5 percent to $148.53.
Marriott's fourth-quarter revenue was $3.7 billion, up 4
percent year over year, while its full-year revenue grew 5 percent to $14.5
billion.
Company Growth & Starwood
During 2015, Marriott added nearly 52,000 rooms, growing the
system to a total of 759,000 rooms worldwide. Of those new rooms, 9,600 are
associated with the company's 2015
acquisition of Delta Hotels and Resorts.
"Our brands continue to be preferred by
developers," Sorenson said. "According to STR, at year-end 2015, 27
percent of hotels under construction in North America were affiliated with one
of Marriott's brands, more than any other hotel company."
Eyeing even more growth globally, Marriott has signed an
agreement with Eastern Crown Hotels Group to develop the Fairfield brand in
China. Eastern Crown in turn intends to sign 140 hotels within five years and
open 100 Fairfield properties by 2021.
On the acquisition front, Marriott and Starwood
Hotels & Resorts jointly announced they would hold special stockholders
meetings on March 28 to approve their merger, first announced in
November.