At the Americas Lodging Investment Summit (ALIS) in Los Angeles, Marriott International, Inc. (Nasdaq: MAR) announced that the company’s deal signings accelerated again in 2022. The company signed an average of two deals a day, for a total of 726 management and franchise agreements, an increase of 21 percent over 2021 signings, representing nearly 108,000 rooms. In addition, Marriott’s City Express transaction, announced in October 2022, is expected to add around 17,000 rooms.
Conversions helped drive signings activity, contributing a robust 20,500 rooms, or approximately 20 percent of rooms signed during the year. Half of the 2022 rooms signed were in international markets, including key growth markets such as India, Saudi Arabia, Mexico, and the Caribbean. The company’s industry-leading global development pipeline totaled over 3,000 properties representing more than 496,000 hotel rooms at the end of the year, excluding the City Express rooms.
During the year, the company added 394 properties, representing more than 65,000 rooms on a gross basis, growing the system 4.4 percent. Including deletions of 1.3 percent, net rooms increased 3.1 percent. Excluding the impact of the company’s exit from Russia, the deletion rate was 0.8 percent and net rooms increased 3.6 percent. At the end of 2022, Marriott’s worldwide system consisted of nearly 8,300 properties and roughly 1.5 million rooms in 138 countries and territories.
“We were pleased with the accelerating pace of development activity in 2022 as the global recovery continued,” said Anthony Capuano, CEO, Marriott International. “The proven resilience of travel is powerful and energizing. Given the attractiveness of our portfolio of global brands, top-ranked Marriott Bonvoy loyalty program, momentum around conversions, and commitment to innovation, we are excited to continue to help lead in the growth of travel.”
Extending Marriott’s Lead in Luxury
With an unparalleled portfolio of nearly 500 luxury hotels and resorts in 69 countries and territories, Marriott is poised to extend its lead in luxury with a record 42 luxury hotel agreements signed last year, representing nearly 8,000 rooms. In 2022, Marriott opened a number of notable luxury properties around the world in locations including Madrid (The Madrid EDITION), New York City (The Ritz-Carlton New York, NoMad), Greece (W Costa Navarino), and Australia (The Tasman, a Luxury Collection Hotel, Hobart).
Conversions Continue to Contribute Meaningfully to Growth
Marriott continues to see strong momentum from conversions, including multi-unit conversion opportunities. In June, Marriott announced a strategic agreement with Vinpearl, to convert and develop 2,200 rooms across eight hotels in Vietnam. Of the eight hotels, six are conversions that have already been added to Marriott’s system. Thanks to a robust portfolio of conversion-friendly brands, the company added more than 80 conversion properties in 2022 in locations around the world including Brazil (JW Marriott Hotel São Paulo) and India (The St. Regis Goa Resort). In the U.S. and Canada region, the company signed 56 conversion deals, representing nearly 8,000 rooms, including a record 34 select-service deals representing nearly 4,000 rooms. The company’s collection brands, including Autograph Collection Hotels, The Luxury Collection, and Tribute Portfolio, represented 30 percent of global conversion rooms signed, with over 6,000 rooms signed in 2022.
“We continue to see conversions provide meaningful growth for our system, reinforcing the value of Marriott’s brands as owners look to reposition assets and maximize returns,” said Noah Silverman, Global Development Officer, U.S. & Canada, Marriott International.
Marriott Jumps into Affordable Midscale
Among the major highlights of 2022, Marriott announced its planned entry into the popular affordable midscale segment. Under an agreement with Hoteles City Express, S.A.B. de C.V., Marriott plans to acquire the highly regarded City Express brand portfolio. As of October 19, 2022, the portfolio was comprised of 152 hotels, including around 17,000 rooms across 75 cities in Mexico and three additional countries in Latin America, and five under-construction projects, representing an additional 676 rooms. Upon closing, the transaction is expected to make Marriott the largest hotel company in the Caribbean and Latin America. Given the high-growth nature of the affordable midscale segment, the company sees opportunities to further expand the City Express by Marriott brand in the Caribbean and Latin America region, as well as in other locations. Marriott expects the transaction, which is subject to regulatory approval and other customary closing conditions, could close in the first half of 2023.
All-In on All-Inclusive in New Segments and Markets
As a top player in the high growth all–inclusive space, Marriott continues to focus on expanding its all-inclusive platform to meet rising guest demand. In 2022, the company added three all-inclusive conversion properties – the Royalton Splash Riviera Cancun, an Autograph Collection All-Inclusive Resort in Mexico, Sanctuary Cap Cana, a Luxury Collection Adult All-Include Resort in the Dominican Republic and The Westin Porto de Galinhas, an All-Inclusive Resort in Brazil. In addition, the company recently announced the signing of three luxury all-inclusive properties in Mexico: Almare, a Luxury Collection All-Inclusive Resort on Isla Mujeres, and a JW Marriott All-Inclusive and W All-Inclusive in Costa Mujeres. Today, the All-Inclusive by Marriott Bonvoy portfolio includes 33 properties in the Caribbean and Latin America, located across Mexico – Riviera Nayarit & Cancun, Jamaica, Barbados, Antigua and Barbuda, Saint Lucia, Costa Rica, the Dominican Republic, Grenada and Brazil. The company anticipates that Southeast Asia and resort markets in Europe and the Middle East could provide additional all-inclusive opportunities in the future.
“We have seen a tremendous year of growth in our international regions,” said Carlton Ervin, Global Development Officer, International, Marriott International. “In the Middle East, we saw a record number of room signings. With rising momentum in our all-inclusive offerings and our planned expansion into the midscale market, we remain focused on providing consumers with more offerings to meet their needs.”
Select Service Growth Stays Strong Globally
Select service development opportunities continue to be a key growth driver for Marriott, representing three-quarters of global deal signings and nearly half of signings across international regions. Marriott’s select service portfolio provides an array of brands including Courtyard by Marriott, Fairfield by Marriott, SpringHill Suites by Marriott, Four Points by Sheraton, Aloft Hotels, AC Hotels by Marriott and Moxy Hotels. In 2022, the company signed 523 select service deals. In addition, the company added 216 select service hotels around the world, including in Greece (Moxy Athens City), Australia (AC Hotel Melbourne Southbank) and Japan (Courtyard by Marriott Nagoya).
Increasing Popularity of Longer Stays
With growing consumer travel preferences for more space driven by the blending of work and leisure trips, the longer stay segment is a highly attractive option for both guests and hotel developers. In 2022, the extended stay category, comprised of the Residence Inn by Marriott, Element by Westin, and TownePlace Suites by Marriott brands, accounted for a record 30 percent of the company’s signings.
“The select service and extended stay segments continue to generate significant growth for the company, particularly in the U.S. and Canada,” said Silverman. “We see exceptional opportunity to propel growth further among our select service and extended stay brands, particularly in underserved secondary and tertiary markets.”
Marriott’s Bridging The Gap Program Tackles Barriers to Entry
In the U.S. and Canada, the company announced in 2022 the launch of Marriott’s Bridging The Gap, a multi-year development program that aims to address the barriers to entry that historically underrepresented hotel owners and developers face. As part of the program, Marriott has allocated $50 million to offer financial and other incentives to qualified historically underrepresented owners and franchisees that will have a controlling equity interest in select branded projects. To date, Marriott’s Bridging the Gap has resulted in nine signed deals in locations including Jackson, Mississippi and St. Louis, Missouri.
Launch of Apartments by Marriott Bonvoy
To meet the growing demand and changing consumer travel preferences for more room and longer stays, Marriott announced its further expansion into the serviced-apartments segment in November 2022. Apartments by Marriott Bonvoy is a residential soft brand with an independent, local design aesthetic. Intended to be introduced in the upper-upscale and luxury segments, Apartments by Marriott Bonvoy will feature a separate living room and bedroom, full kitchen, and in-unit laundry, but will be differentiated from hotel product by not typically offering certain traditional hotel services such as food and beverage and meeting spaces. Apartments by Marriott Bonvoy is anticipated to offer developers the flexibility to build new properties or convert existing properties, with a design approach similar to the company’s Autograph Collection Hotels and Tribute Portfolio brands.
About Marriott International
Marriott International, Inc., (NASDAQ: MAR) is based in Bethesda, Maryland, USA, and encompasses a portfolio of nearly 8,300 properties under 30 leading brands spanning 138 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company offers Marriott Bonvoy®, its highly awarded travel program. For more information, please visit our website at www.Marriott.com, and for the latest company news, visit www.MarriottNewscenter.com. In addition, connect with us on Facebook and @MarriottIntl on Twitter and Instagram.