Marriott puts innovation first and sees huge opportunities for growth
Luxury hotelier Marriott International, the world’s largest, says that it sees huge potential for worldwide growth, and encodes a love of change and innovation right into its DNA. In a recent interview with Barron’s, CEO Arne Sorenson (who recently featured in the publication’s list of best CEOs for the second year running) took the time to explain why change was a good thing, and where the company sees growth coming from in the future.
Marriott’s share price has appreciated by 28% so far this year
Source: Yahoo finance
Responding to questions over the multiple changes that have occurred at Marriott since his tenure began (2012), Sorenson said the company had seen change “partly because we love change, and we’re likely to see a lot more of it in the future.” This ability to “adopt change and innovation as one of its mantras” is a positive one, he said, adding: “the capacity that the organization has to do that and continue to take care of the core operation of our business has been pretty powerful. We are at a good place.”
Change, of course, is only a positive if it’s managed. One of the areas Marriott is looking to take control is in a transition from a pure-play hotelier towards a more travel-oriented company. Sorenson said: “Homes & Villas [Marriott’s home-rental business] is recent proof of where we are going. We want to continue expanding from the hotel space into the travel space. We made a move a few years ago into experiences with a third-party company providing its experiences to our platform. But, increasingly, we have complemented that with our own Marriott Bonvoy experiences; there are more than 100,000 experiences on our site.”
But perhaps most exciting for investors is the company’s growth trajectory. Sorenson is clear on this point: the goal is the world. He told reporters: “Our penetration in the rest of the world, almost without exception, is meaningfully lower than in the U.S. So, in most markets around the world, we’d say we have the opportunity to grow through new-build projects and taking some existing hotel products and converting them to our brands. Many of the big Asian markets—China and India, for example—are principally new-build markets because they are growing their supply of hotel space. We want to make sure to continue to take our share of the new construction. China is the second-biggest market for Marriott, with at least 350 hotels open today and a pipeline of about the same size.”
Dominion holds Marriott International in its Global Trends Luxury Fund.
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