Marriott rolls out its ‘asset-light’ strategy, selling Starwood properties
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Marriott rolls out its ‘asset-light’ strategy, selling Starwood properties

Marriott International, the world’s largest hotelier with 30 brands and 6,000 hotels globally, is becoming famous within the industry for its “asset-light” management model. What this means is, Marriott prefers to not own real estate, but rather the brands that operate through it. After purchasing Starwood Hotels and Resorts for $13.3 billion, it’s been left with some serious assets to sell.

Marriott is up 12%, year-to-date

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SOURCE: Yahoo Finance

Earlier this week, Marriott completed its second sale since acquiring Starwood, in an effort to realize more of the $250 million in annual synergies the deal could provide. The Westin Maui Resort & Spa at Kaanapali beach has been sold to Trinity Investments and Oaktree Capital Management for $317 million. The first sale, last December, was St. Regis San Francisco, for $175 million to the Qatar Investment Authority.

Speaking to industry publication Skift, Marriott’s chief financial officer, Leeny Oberg, said:

“We are proud to announce the sale of this iconic resort property and to expand our portfolio with our strong global partners, Trinity and Oaktree. The sale demonstrates the strength of the Westin brand and reaffirms our commitment to our asset-light strategy as we continue our merger integration. We have a great record of asset recycling. We still have 13 hotels as a part of Starwood and we’re in the process of looking at the strategy for each and every one of those hotels. This is actually a continuation of Marriott’s asset-light strategy, which we’ve had for a number of years now.”

Marriott hopes to earn around $1.5 billion from the sales of these assets in total, which will “go towards reinvesting and growing our business even further,” according to Oberg.

The company will continue to manage the Maui Resort & Spa under its Westin brand.

Disclosure

Dominion holds Marriott International in its Global Trends Luxury Fund.


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