The group’s 2022 year-end financial results showed that net rooms grew 3.1% over those 12 months.
Marriott International added more than 65,000 rooms within 394 properties globally during 2022, including approximately 40,000 rooms in international markets and nearly 17,500 conversion rooms.
This progress means the company is predicting net room growth for 2023 of between 4 and 4.5%.
Fourth quarter figures
The company added 145 properties (22,589 rooms) to its worldwide lodging portfolio during Q4 2022, including nearly 6,900 rooms converted from competitor brands and approximately 16,700 rooms in international markets.
Eighteen properties (4,484 rooms) exited the system during the quarter. At the end of the year, Marriott’s global lodging system totalled nearly 8,300 properties, with over 1,525,000 rooms.
At the end of 2022, the company’s worldwide development pipeline amounted to 3,028 properties comprising more than 496,000 rooms, including 1,009 properties with approximately 199,000 rooms under construction, or 40% of the pipeline.
At that point, 133 properties with roughly 22,300 rooms were approved for development, but not yet subject to signed contracts.
Anthony Capuano, CEO, analysed: “Owners and franchisees continue to show a strong preference for our brands. Our development team had an excellent year, signing nearly 108,000 rooms globally. We were pleased to see nearly 40% of those rooms in high value luxury and premium brands.
“With nearly 50% of rooms signed during the year in international markets, we look forward to further expanding our distribution and adding more options for our over 177 million Marriott Bonvoy members.”
During the group’s Q4 earnings call, Capuano summed up: “Given strong global operating trends, overall developer sentiment improved in 2022, and we had another year of strong signing activity.
“Momentum in conversions continues, including in multi-property opportunities, thanks to the breadth of our roster of conversion-friendly brands across the chain scales. The meaningful top- and bottom-line benefits associated with being part of our portfolio make these brands very attractive to owners. Conversions represented nearly 20% of room signings and 27% of room additions in 2022.”
Annual pipeline rise
While the quarter-on-quarter pipeline figures decreased slightly, Capuano was keen to emphasise: “The pipeline tends to ebb and flow quarter to quarter. The statistic that I think is a bit more telling is the 2% year-over-year increase in the pipeline.
“In a year where nearly 30% of our openings were conversions, some conversions never even make it into the pipeline, as they get signed and opened quite quickly.”
He believes there’s a mixed picture for newbuild hotel developments, detailing: “The financing environment for new projects and hotel sales remains challenging, especially in the US, given higher interest rates and uncertainty surrounding a potential economic downturn.
“However, other industry headwinds like supply chain disruptions, construction costs, and availability of labour, have improved.”
Also during the earnings call, Leeny Oberg, chief financial officer and executive vice president, business operations, outlined a positive outlook for Marriott’s monetary outlay. She said: “After three years of meaningfully reduced investment spending, we anticipate 2023 spending of US$850 million to US$1 billion.
“This includes US$100 million for the expected acquisition of the City Express brand portfolio, and around US$160 million of renovation spending on our owned W Union Square hotel in New York and the Elegant portfolio in Barbados. These hotels will be terrific representations of our W and all-inclusive brands when completed. We expect to recycle our capital investment in these hotels by selling the renovated hotels with long-term agreements.”
Adding his thoughts on the October 2022 deal to acquire Mexico-based hotel brand, City Express, Capuano explained: “Upon the anticipated closing of the transaction, the City Express portfolio should add around 17,000 rooms in the moderately priced midscale space. We are excited about the opportunity to expand in this segment in the Caribbean and Latin America, or CALA region, as well as in other locations around the world.
“We’ve not made definitive decisions about when and if we will roll out City Express in other places, but those evaluations and discussions are going on. If you look at our historical track record of acquisitions, many of them initially either strengthened our leadership position or gave us a meaningful foothold in a region where we weren’t growing as quickly as we’d like organically. And then over the passage of time, we looked for opportunities to grow that platform more broadly. And I think the same strategy will apply to City Express.”
Elsewhere, regarding China developments, Capuano foresees market stimulation now that the country’s covid restrictions have been relaxed: “China signings last year were down about 15% from where we were in 2021. And they were down a little more than one-third from where we were in 2019.
“As the borders open, we expect to see meaningful positive impact certainly on demand patterns, but also on the health and the outlook of our development partners. And so we would expect an acceleration in deal volume.”
As to Marriott’s worldwide prospects, he concluded: “Notwithstanding some of the constriction in the debt markets, we are encouraged that we are seeing incremental acceleration of construction starts, albeit not back to where we were in 2019.
“We are encouraged by what we experienced both on the signings and openings front in 2022 with conversions, and expect that momentum to continue to build both on an individual asset basis and a portfolio basis.”