Marriott Lays Out Three-Year Growth Plans

The DJIA fell 69 points while Nasdaq was up 29, the S&P 500 was up a point and the 10-year treasury yield jumped another .07 to 4.63%. Lodging stocks were mostly higher on the day. The only big mover was AINC, to the downside by another -12% to another new low.

STR reported US lodging data for the week ended September 23. US hotel RevPAR was up 1.2% for the week. Group RevPAR was up 1.8%.

Barclays lowered their price target on Travel + Leisure to $38 from $43. They maintained their Equal Weight rating. Barclays also lowered their price target on Marriott Vacations to $118 from $131. They maintained their Overweight rating on VAC.

Marriott International outlined three-year growth plans at their Analyst Day. The company reiterated its 2023 outlook given in August and introduced two-year compounded annual growth rates (CAGRs) from 2023 to 2025 for certain key performance metrics. Marriott plans to add 230,000 to 270,000 net rooms over three years, expanding its global portfolio to nearly 1.8 million rooms by year-end 2025. This represents a three-year CAGR for net rooms of 5.0% to 5.5%. In addition, the company’s model assumes global RevPAR growth at a two-year CAGR of 3% to 6% from 2023 to 2025, after rising 12% to 14% this year. Given the assumption in its three-year model, the company could produce the following results: Total gross fee revenues could rise to 16% to 18% year-over-year in 2023 and at a 6.5% to 9.5% CAGR to reach $5.4 to $5.8 billion in 2025. Adjusted EBITDA could increase 18% to 21% YOY in 2023 and at a 7% to 10% two-year CAGR to reach $5.2 to $5.7 billion in 2025. Adjusted diluted EPS could rise 15% to 29% YOY in 2023 and at a 10% to 15% two-year CAGR to reach $10.10 to $11.45 in 2025. Shareholders could see $1.9 to $2.0 billion in dividends, assuming a 25% payout ratio, and $9.8 to $11.6 billion in share repurchases, for total shareholder returns of $11.7 to $13.6 billion over the three-year period through 2025. Marriott announced a new brand for its Europe, Middle East and Africa region, Four Points Express by Sheraton, and also plans to further expand in the extended stay segment, having recently announced the launch of Apartments by Marriott Bonvoy. The company is also emphasizing luxury and leisure offerings. It is currently leading in luxury distribution globally, with nearly 500 open luxury hotels and 17% of the market, with another 225 luxury properties in the pipeline. 

MAR announced the launch of Four Points Express by Sheraton, designed for the midscale segment, in Europe, the Middle East and Africa. Four Points Express by Sheraton will offer value-conscious consumers a seamless hotel experience in a convenient location, with principles of reliability, simplicity and value in both the design and guest experience. Four Points Express by Sheraton London Euston, the first UK hotel, is expected to open in 2024 with 201 guestrooms following a significant renovation of the current property. In Turkey, two Four Points Express hotels have been signed in Antalya and Bursa. Four Points Express by Sheraton Antalya plans to offer 52 guestrooms upon its anticipated conversion in late 2023. Four Points Express by Sheraton Bursa Nilufer will offer guests a convenient location close to the highway that connects Bursa, Istanbul and Izmir.

Last night at the opening of the Skift Global Forum, Chris Nassetta, CEO of Hilton, made it clear that the company is going to continue pushing into the economy segment.  He said the new Spark brand may not their sexiest brand but is the most disruptive. Nassetta believes Spark and other economy brand launches to follow present the greatest growth opportunities for HLT as they will be serving tens of millions of incremental customers they are not serving today as the biggest segment of demand is economy.

Related Group and Merrimac Ventures plan to launch a Waldorf-Astoria-branded condo development in Pompano Beach, Florida, marking the second Waldorf Astoria & Resorts-branded condominium in South Florida and the second major hotel-branded development in Pompano Beach. The 28-story, 92-unit tower will feature two restaurants, a pool deck topping the three-story parking podium and about two dozen boat slips.

The Courtyard by Marriott Washington Capitol Hill/Navy Yard has completed a comprehensive property renovation. Managed by HHM Hotels and located in the heart of DC’s Navy Yard neighborhood, the property offers 204 guestrooms and suites, The Bistro, and 3,762 square feet of fully renovated event space.

A joint venture of NewcrestImage and Dabu Group has acquired the full-service Marriott Dallas/Fort Worth Westlake, in Westlake, Texas. The 294-room hotel will undergo a complete renovation and features a concierge level with private lounge, a fine dining restaurant, coffee shop, outdoor pool, business center and approximately 15,000 square feet of meeting space. Newmark Lodging Capital markets arranged the sale on behalf of the seller.

A new hotel in Clayton, Missouri is one step closer to completion. An AC Hotel is revitalizing the site of the former Clayton Police headquarters on South Central Avenue. Once the $50 million project is fully completed, it will add more than 200 hotel rooms to the Clayton area. It is set to open in the Spring of 2024. 

In Asheville, North Carolina, a 115-room hotel has been proposed for Haywood Street, a downtown street already filled with hotels. If approved, the new Courtyard by Marriott will include a business center along with a rooftop restaurant and bar. The project is estimated to cost around $20 million. The plans were submitted by Parks Hospitality Group Asheville. The Courtyard by Marriott would be the third PHG hotel in the Asheville area. To develop the property, the owners must demolish the former Mountain Credit Union building. The hotel has a projected opening date in the fourth quarter of 2025.

The Boston Park Plaza hotel is under contract to be purchased by Parks Hospitality Holdings. The 1,060-room property will be rebranded as the Hilton Boston Park Plaza, following the sale which is expected to close in late October 2023. Hilton will manage the hotel as part of the deal. Newmark arranged the sale.

JMS Development signed franchise agreements with Wyndham Hotels & Resorts to build two hotels connected by a breezeway as part of the Osprey Pointe development in Pasco, Washington. The $450 million project will also include residences, restaurants, parks and an amphitheater. The proposed hotels, a 250-room Wyndham hotel and a 146-room Wyndham Garden, will cost an estimated $75 million to build and will be financed with a mix of traditional bank loans and private funds.  JMS has three years to start construction. 

Bunkhouse announced plans for its latest boutique property, Hotel Daphne, scheduled to welcome guests in early 2025, marking Bunkhouse’s second hotel project in Houston, Texas. Hotel Daphne will comprise 47 rooms and suites, an all-day restaurant, a bar and lounge, courtyard, pool with a pool bar, a library and a lobby retails shop. 

Choice Hotels International, Inc. announced the groundbreaking of Everhome Suites Bozeman, slated to open Summer 2024 in Bozeman, Montana. The property will offer weekly housekeeping, multipurpose lobby areas, Homebase Market, a fitness center and guest laundry facilities. 

A San Jose, California hotel development site was seized in a real estate foreclosure. A four-story, 132-room hotel was proposed for the site but was never constructed. LBC Capital Income Fund and members who head the Fogel Family Trust took ownership of the property by foreclosing on a $4.6 million loan the lenders have provided to the development group in 2021. North Start Hotel Development proposed the hotel project on land it bought for $6.5 million in 2019. The unpaid debt on the site has risen to about $5 million at the time the foreclosure proceeding was completed. In the wake of the foreclosure, the future of the development site is unclear. 

Casino owner Bally’s and True North Hotel Group are planning to build a 123-room hotel outside Bally’s Kansas City, Missouri casino. Bally’s Kansas City is the only casino property with a hospitality component on the Missouri side. 

Personnel Moves

Mission Hill Hospitality named Tom Barber Chief Financial Officer, a newly-created position. Tom joined Mission Hill Hospitality as Managing Director of Acquisitions when the firm was launched in March 2021. Before joining Mission Hill, Tom served as Global Chief Development Officer of Wyndham Hotels & Resorts.

Canyon Ranch appointed Mark Rivers as its new Chief Executive Officer. Rivers previously served as Canyon Ranch’s Head of Resort Development and now, as CEO, will retain responsibilities for development and new business. A former executive/principal with Solage Hotels and Resorts Napa Valley and Mirage Resorts in Las Vegas, Rivers is the original master developer of what is now the Driftwood Gold and Ranch Club in Austin.