Marriott said that its talks with hotel owners who want a bigger cut of the pie have been "constructive." It's easier for everyone to stay polite about the fee math when profit growth has revived significantly.
Marriott’s fees are climbing just as some of its hotel owners push for a bigger share of them.
Gross fees rose 14% to $1.52 billion in the third quarter, helped by a larger hotel network and by co-branded credit card fees, which Chief Financial Officer Jen Mason said on a Monday earnings call were “expected to rise in the high 30% range” for the full year. A group of owners wrote to Marriott’s management earlier this year asking for a bigger share of loyalty income, citing the card fees in particular. Net income rose 17% to $790 million.
Strong results may also give Marriott more leverage in those talks. Worldwide revenue per available room (RevPAR) rose 6.5% year over year, far above the 3.5% to 4% the company had projected in August, and Mason cited “a solid improvement in hotel margins.”
The gains reached the hotels that had been struggling most. Limited-service hotels posted a third consecutive quarter of RevPAR gains, up more than 6%.
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Tags: credit cards, earnings, franchisees, hotel deals, hotel development, hotel owners, loyalty, marriott