Marriott International is to open 80 hotels in the Asia-Pacific region, including the debut of its Moxy Brand and Delta Hotels.
The news came as Interstate Hotels & Resorts launched a team to cater to Asian owners seeking to invest in hotels in the US and Europe.
Marriott International sad that it would open 19,000 new rooms in the region and, with the addition of Delta and Moxy, would take it to 23 of its 30 brands.
Craig S. Smith, president & managing director, Marriott International Asia Pacific, said: “We are looking at nearly 80 new properties slated to open their doors this year, which means an average of two hotels a week from now till the end of the year. With our larger portfolio of individually distinctive brands across destinations, we now provide guests greater access unprecedented choices and unparalleled benefits on their travels whether for business or leisure.”
At the company’s first-quarter results, president & CEO Arne Sorenson told analysts that the group was “encouraged” by recent economic growth in the region. First quarter systemwide revpar increased 5% with strength in retail and corporate business. Revpar in India and Indonesia increased at double-digit rates, while in Greater China systemwide revpar rose 5% with strength in Beijing, Shanghai, and Shenzhen. Hotels in Mainland China, Hong Kong, and Macau outperformed expectations in the quarter.
The group expects second quarter and full year revpar in the Asia-Pacific region to increase at a mid single digit rate, higher than prior guidance due to strengthening transient demand.
Sorenson added: “Hotel development is picking up in Asia, even as new construction moderates in China and India. We are seeing an uptick in conversions in those countries and greater construction elsewhere in the Pacific Rim.”
According to a Lodging Econometrics report in March, the top hotel companies in the Asia Pacific Construction Pipeline, excluding China, were Marriott International, with 238 hotels and 53,986 rooms, InterContinental Hotels Group, with 121 hotels and 28,278 rooms and Hilton with 70 hotels and 15,281 rooms.
The largest brands in the pipeline for each of the these companies were: Marriott Hotels with 29 hotels and 7,930 rooms, Holiday Inn with 45 hotels and 11,676 rooms and Hilton’s eponymous brand with 24 hotels and 6,102 rooms.
The confidence is being backed up locally, with Tourico Holidays reporting that inbound hotel room bookings to China had increased by 106% in the first 17 months of of the year against 2016. Tourico’s data also showed that outbound hotel bookings grew by 70% in the same period.
The Republic of Korea (+68%), the US (+10%) and the UK (+40%) continued to be among the strongest source markets to China, while emerging markets such as India (+160%), the UAE (+212%), and Brazil (+90%) were adding to demand.
“Regional political turmoil, such as the nuclear crisis in the Korean Peninsula, make the inbound China market more unpredictable this year – as Korea was the number one inbound source country for China last year – but, so far, Chinese travel business remains very strong,” said Hillary Wang, regional director, product development, North Asia, Tourico Holidays. “In fact, Tourico is predicting it will double its overall Chinese business in 2017, as both the larger markets and emerging markets continue to demand product in China.”
STR’s April 2017 Pipeline Report showed 608,581 rooms in 2,753 hotel projects Under Contract in the Asia Pacific region, up 3.7% on the year. There were 270,115 rooms in 1,185 projects In Construction for the month, up 6.5% on the year. For those in construction, Shanghai was the leading market, with 10,325 rooms in 42 projects.
The company reported that occupancy for the region in the same month was up 3.5% to 72.6%, with ADR up 0.8% to USD102.18 and revpar up 4.4% to USD74.17.
HA Perspective [by Katherine Doggrell]: Marriott International’s acquisition of Starwood Hotels & Resorts pushed it to the top of the list in the Asia Pacific region, a move which it is now eager to capitalise on by introducing more brands from its not-inconsiderable stable to the area.
At the time of going to press the company had not confirmed how much of this expansion was driven by owners and how much to fill in gaps in the wishes of its loyalty programme members. What is certain at this point is that the Asia-Pacific region is a nice little earner for the group, with Sorenson having pointed out to analysts that the portfolio tended not to have owners’ priority (the agrees amount of return before an incentive fee is due). Of the USD17m in incentive fees that came in above the group’s expectations in the first quarter, USD7m came from Asia-Pacific.
The group is not solely pushing its brands, however and last week described itself as the industry’s “most powerful independent hotel platform”, with more than 240 independent hotels under three collection brands, expecting to grow by nearly 50% by 2019.
Stephanie Linnartz, EVP & chief commercial officer, Marriott International, told the NYU conference: “Independent hotels are an invaluable part of our portfolio, because they make our loyalty programme more compelling, our sales efforts more effective and our overall hotel portfolio even more attractive to guests.”
The brands roll out and the fees roll in. Even the brands with no brands.