Marriott details three year growth plan

Pictured: Marriott International headquarters in Bethesda, USA. Imagery courtesy of Moreau1 via Wikimedia Commons.
Marriott International has outlined its expansion strategy for the next three years during a meeting with institutional investors and security analysts at W South Beach in Miami Beach, Florida, USA.

As part of the presentation, Marriott discussed the priority it is placing on generating global rooms growth over the long term.

Focus areas

The company specified its efforts to grow the distribution of its more than 30 brands, while also introducing new brands and offerings that meet customers’ evolving needs. Its key priorities to support its growth plans are focusing on the midscale, extended stay, leisure and luxury segments, as well as conversions.

Strong deal production has driven Marriott’s total pipeline to nearly 547,000 rooms as at the end of Q2 this year, with 48% of projects already under construction or pending conversion. The group expects 230,000 to 270,000 net rooms to be added in 2023 through 2025, yielding a net rooms CAGR of between approximately 5% to 5.5%.

Tailored midscale approach

The company expects to follow a tailored development approach in its expansion in the affordable midscale segment, recognising differences by continent to accommodate regional customer and owner expectations.

To date, Marriott has completed the City Express brand portfolio acquisition in the Caribbean and Latin America region, created the StudioRes midscale extended stay brand in the US and Canada region and announced the new Four Points Express by Sheraton brand for its Europe, Middle East and Africa region. The business also plans to further expand in the extended stay segment, having recently announced the launch of Apartments by Marriott Bonvoy.

Luxury and conversion strength

Marriott also emphasised its luxury and leisure offerings. It estimates it is currently leading in luxury distribution globally with nearly 500 open luxury hotels and 17% of the market. The company remains focused on extending its position with another 225 luxury properties in the pipeline.

Conversions, particularly multi-unit conversions, are also a critical piece of the company’s overall growth strategy. In the first six months of 2023, conversions accounted for 63% of room signings, including the recent MGM Resorts transaction, and 25% excluding MGM.

Three paths to win

Anthony Capuano, president and CEO, Marriott International, summed up: “With global travel poised for continued robust growth, our strategy is to deliver the best brands and experiences for consumers, to attract and retain the most loyal guests and to be in more places around the world. These are our three paths to win.

“As consumers continue to prioritise travel and experiences, we are focused on transforming our technology platform while leveraging our powerful revenue engines and our leading Marriott Bonvoy loyalty programme to connect people through the power of travel.

“At the end of the second quarter, 7% of global hotel rooms carried one of our brands and 19% of global rooms under construction were in our pipeline, making us poised for even greater market share. With our extraordinary associates around the world, I am incredibly optimistic about Marriott’s future.”