Bethesda-Based Hotelier and Rival Starwood Each Announce a Doubling Of Their Footprint In Fasting-Growing China Market
Marriott International, Inc. (NYSE: MAR
) has unveiled an aggressive strategy to expand by up to 105,000 rooms worldwide by 2014, with the hospitality giant on track to invest $2 billion and open one hotel a month in China for the next three years for a total of 100 properties across 40 Chinese markets.
In a major shift in focus away from expansion in the U.S. and Europe and a nod toward the rising influence of Pacific Rim markets, Bethesda, MD-based Marriott announced that it is on track to have 4,000 hotels in 90 countries across 14 brands by 2014, including between 90,000 and 105,000 new rooms around the world. The expansion includes a doubling of Marriott’s presence in China.
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"Even today, China is our second-most important market after North America, representing roughly 5% of total fees," said Arne Sorenson, Marriott International's president and chief executive officer, during a securities analyst meeting this week in Beijing.
Not to be outdone, competitor Starwood Hotels & Resorts Worldwide Inc. (NYSE: HOT
) on Wednesday announced its own doubling of its China presence from the current 100 properties to more than 200.
Thanks to strong worldwide cash flow, Marriott expects to invest $2.6 billion to $2.8 billion from 2012 through 2014 and could raise $1.6 billion to $1.8 billion in fee revenue globally, assuming strong revenue per available room (RevPAR) growth of 6-8%.
Marriott plans to hire 30,000 employees by the end of 2015 in China, which fueled by a dramatically growing middle class is also now the third-largest market for international travel behind the U.S. and Germany, with 70 million travelers annually, Sorenson said.
One million Chinese visited the U.S. in 2011 and the number is expected to grow to 3 million by 2016, Sorenson said.