Every quarter, publicly traded companies report earnings to Wall Street and provide commentary on the quarter.
Marriott’s turn was last night, and it’s one that I pay particular attention to, since it is now the owner of both all of the Marriott brands and all of the former Starwood brands. What they say matters.
What We Learned
- Things are still good in hotel-land. RevPAR*, an important measure of growth, was up 2.1% over the same figure last year. Although it was flat in the United States, it was up around the world, with Europe leading the charge at 9%. It’s expected to continue in the fourth quarter, with North America up 2-3% and 3-5%.
- Marriott is currently renegotiating its credit card agreement with JPMorgan Chase and American Express. This one matters. Those credit card agreements allow banks to bid for business, and travel providers have been winning big concessions from the banks over the past few years. American Express currently offers the Starwood credit card and is in no position to lose a contract to Chase, so expect the outcome to be highly beneficial for consumers (and Marriott). We should know something in the next few months.
- Management said little about the loyalty programs, but CEO Arne Sorensen implied that it would not be in 2018. I’m hoping that it’s sooner rather than later, since managing multiple accounts and not being able to count Starwood nights to Marriott (or vice versa) has become bothersome.
*Beginner’s Hint: RevPAR stands for “revenue per available room.” It measures how many dollars the hotel brought in per room that was available for sale, whether the room was actually used or not. Thus, it accounts for both hotels that fill 100% of their rooms at bargain basement prices as well as those that have very low occupancy, but at very high prices. The best place to be is that point where occupancy*room rate is highest.
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