Marriott Makes News, Meets Investors In China

　　Marriott International is making big news in China this week as it meets security analysts and institutional investors in Beijing.

　　President and CEO Arne Sorenson on Tuesday told investors, “China is a fitting place to present our tremendous global growth story and discuss our outstanding financial prospects. Even today, China is our second most important market after North America, representing roughly 5% of total fees. On average we expect to open a hotel a month in this country over the next three years.” In fact, Marriott expects to have more than 100 hotels across nine brands and nearly 40 markets in China by 2014.

　　Sorenson said Marriott is on track to have 4,000 hotels in 90 countries across its 14-brand lodging portfolio by 2014. With 115,000 hotel rooms in its development pipeline, it could open between 90,000 and 105,000 new rooms around the world in 2012 through 2014, not including the planned Gaylord acquisition.

　　To further amplify its Beijing visit, Marriott on Tuesday unveiled its “Li Yu” welcome program that features a suite of customized amenities and services tailor-made for Chinese outbound travellers. “Li Yu” means “Serve with Courtesy” in Mandarin. The program aims at providing a full array of amenities and services that are designed specifically with Chinese outbound travelers.

　　Tuesday also marked the opening of the 319-room Guangzhou Marriott Hotel Tianhe in the center of the Tianhe Business District in partnership with hotel owner Guangzhou Grandview Enterprise Co. Ltd.

　　Sorenson further explained to the investment community in Beijing that assuming 6% to 8% compound growth in worldwide systemwide Revenue per Available Room (RevPAR) for 2012 through 2014, diluted earnings per share could reach US$2.45 to US$2.85 in 2014.

　　Discussing its operating model, the company could generate between US$1.8 billion and US$1.9 billion in worldwide fee revenue through 2014, assuming compound worldwide systemwide RevPAR growth of 6% to 8%.

　　With strong cash flow expected, Marriott assumes investment spending of US$2.6 billion to US$2.8 billion from 2012 through 2014. The company expects to recycle US$800 million to US$1 billion of capital during the period. Assuming this level of net investment, a 6% to 8% RevPAR growth scenario and new debt issuances, the company could have US$4 billion to US$4.7 billion to return to investors or deploy in additional opportunistic investments over the next three years.

　　Highlighting its commitment to and focus on the China market, Marriott plans to hire 30,000 employees in the country by the end of 2015. The company now has 1 million Chinese members in its 38 million-member guest loyalty program, Marriott Rewards, and has also established a fresh water conservation initiative, “Nobility of Nature,” in partnership with local communities in Sichuan Province.