India-based hotel ownership and asset management platform Samhi Hotels has refiled draft papers with the Indian stock market regulator Securities and Exchange Board of India (SEBI) to raise an initial public offering (IPO) of around $120 million.
The Goldman Sachs-backed company that operates hotel chains like Marriott, Hyatt and IHG in India, had earlier filed a draft red herring prospectus with SEBI in September 2019 to raise around $238 million.
Samhi had obtained the markets regulator approval in November 2019, to float the initial share-sale, but the company at that time did not go ahead with the launch.
Last week, while reporting the Yatra earnings, Skift had talked about the subdued sentiments in the Indian stock market, as a result of which many companies wanting to launch their IPOs were said to be in a “wait-and-watch” mode.
Hospitality platform Oyo too disclosed last week that it is reducing the size of its proposed initial public offering to between $400-$600 million, a steep reduction from its earlier plan of $1.1 billion.
The company would be using net proceeds from the IPO towards the repayment of debt of the firm and its subsidiaries, payment of interest and other general corporate purposes.
As of February 2023, Samhi Hotels has the third-largest inventory of operational keys (owned and leased) in India. The company has a portfolio of 3,839 keys across 25 operating hotels in 12 cities, including Bengaluru, Hyderabad, National Capital Region, Pune, Chennai and Ahmedabad.
The company is also the largest owner of the Fairfield by Marriott and Holiday Inn Express brands in India. For the financial year ended March 2022, the company reported an increase of 90 percent in revenue to $40 million, as against $21 million in the previous fiscal.
Booking.com, which has marketing relationships with the International Cricket Council and the Union of European Football Associations, is playing ball with Major League Baseball.
The company will officially announce today that it has become Major League Baseball’s official online travel partner. Among travel-related services, the league also counts MGM Resorts and Capital One, which offers Capital One Travel, as official sponsors. Marriott has also been a partner.
Booking.com declined to release financial details of the marketing partnership, but said fans will begin to see Booking.com branding in baseball stadiums across the U.S., and there will be a new media campaign getting under way in several weeks.
With the launch, the official schedule pages of Major League Baseball teams will feature Booking.com icons that direct people to search and book accommodations near stadiums.
A recent Booking.com survey found that 49 percent of U.S. baseball fans plan to travel to at least one game in 2023, and 61 percent would be open to traveling as far as 500 miles to see teams play.
Booking.com, based in Amsterdam, has been making significant inroads in the U.S. market, trying to challenge Washington-based Expedia as the market leader.
With hotels seeing a big bounce in bookings, so too can they expect to see more so-called rogue rates creeping back. These are rates that they’ve not authorized, and are a common complaint. Now one of the major bedbank players has developed a platform to help hotels fix any rogue rates they spot.
WebBeds, the accommodation marketplace owned by Australia’s Webjet, has launched a tool called Parity Monitor. It will first act as a hub where hotels can submit parity discrepancies to WebBeds, which connects accommodation providers to a network of 44,000 offline and online travel buyers.
It’s just the first phase of a program, as later it will let its hotel partners track, monitor, report back and eventually resolve rate discrepancies. WebBeds also said it had set up a centralised team dedicated to resolving parity issues.
“WebBeds is very aware of the frustrations that our hotel partners experience when there are rate parity discrepancies in the market,” said WebBeds CEO Daryl Lee.
As executive vice president for development, Oberg will advocate for the Bethesda, Maryland-based company’s portfolio of 31 brands as the company aims to woo investors and developers to pick its offerings.
In related news, CEO Anthony Capuano on Friday became president, not just top boss. Capuano added the title after Stephanie Linnartz, the previous president, left Marriott to become CEO of Under Armour.
Marriott also said on Friday that it had appointed veteran Tina Edmundson president of luxury, and long-time leader Peggy Fang Roe as executive vice president and chief customer officer.
Leeny Oberg has long had an intimate fluency with the group’s strategic plan — regularly on display in analyst calls with investors and public presentations. She spoke on-stage in New York as Marriott International’s chief financial officer at Skift Global Forum 2019. Video, here:
Marriott International CEO Anthony Capuano on Tuesday toured the Evirma, the first sailing vessel in The Ritz-Carlton Yacht Collection. Capuano said in an interview that yacht-style cruises on the 623-foot Evrima — which hosts fewer than 300 people at a time — represent an important pillar of growth for the world’s largest hotel operator by pulling the levers of loyalty and luxury.
More than 70 percent of the bookings since the first October sailing has come from members of Marriott’s Bonvoy loyalty program, and the company sees the yachts as a way to fill in the matrix of interest in its program members.
“Luxury is a big part of the appeal of the Bonvoy program and a big driver of engagement with Bonvoy,” Capuano said.
Fares on the Evrima start at a minimum of $5,000 per person for a week and can rise beyond $25,000 per person.
About 70 percent of Evirma passengers have never been on the cruise before. So the offering is a way to leverage the Ritz Carlton brand name for additional spending from an existing customer base.
“It is core to our strategy to continue to look for ways to connect ourselves with our loyal customers throughout their travel journeys, whether you and I were talking about Marriott Homes and Villas or the launch of a mid-scale like City Express or the Ritz-Carlton Yacht Collection — they are all touchpoints that allow us to meet the needs of our consumers without ever looking outside the ecosystem,” Capuano said.
Yacht-style itineraries enable a more leisurely pace with more overnights in port than the typical large luxury cruise offers, plus the ability to access and explore smaller ports, such as Saint-Tropez, Ibiza, and St. Barts.
But playing in the luxury space has its perils. The more complex the product and the more high-touch the service, the more room there is for cost overruns. Spanish media have reported on financial filings from a shipyard claiming that the Evirma was budgeted at $300 million but cost twice as much.
Capuano said that the last few years brought a laundry list of “unusual challenges to owner economics,” with a mix of problems affecting supply chains. However, he said his company has long experience in executing luxury products well.
Marriott is the first of its hotel and resort peer companies to test the waters on yacht-style cruising, but three other companies in recent months — Four Seasons, Aman, and Orient Express — announced plans to offer luxurious yacht-style cruise lines.
More broadly, luxury is a key segment in Capuano’s vision for company growth.
“I continue to drive focus within the organization on luxury,” Capuano said. “Luxury represents about 10 percent of our global room inventory but about 20 percent of revenues through related fees. So from a purely economic perspective, the luxury portfolio and footprint are critically important.”
Marriott runs nearly 500 luxury hotels and resorts, with plans to open about 35 more luxury hotels this year out of a pipeline of roughly 200 properties.
“You can continue to see us make investments movements of dedicated capital to ensure that we maintain our significant lead in the luxury tier,” Capuano said. “We have a singularly unique portfolio in that we have a really compelling blend of classic luxury brands like Ritz Carlton and Saint Regis and emerging lifestyle luxury brands like Edition and W Hotels.”
The operator of brands such as Ritz Carlton, Bvlgari Hotels, W, and Edition last year signed deals to develop 42 luxury hotels — a company record — adding to its nearly 500 open luxury properties. These luxury hotels represent nearly 8,000 rooms.
Growth in Extended Stay
Marriott also had continued momentum at the lower end of the spectrum in 2022, which represents most of the nearly 8,300 properties it had open worldwide as of late December.
In 2022, the company’s extended stay brands — Residence Inn by Marriott, Element by Westin, and TownePlace Suites by Marriott brands — made up a record 30 percent of the company’s signings.
Interest in extended stay from developers is partly driven by consumers seeking more space, “driven by the blending of work and leisure trips,” Marriott executives said.
“The select service and extended stay segments continue to generate significant growth for the company, particularly in the U.S. and Canada,” said Noah Silverman, global development officer, U.S. & Canada, at the Americas Lodging Investment Summit (ALIS) in Los Angeles.
In 2023, the company will particularly look at “underserved secondary and tertiary markets” for additional extended-stay growth, Silverman said.
Overall, last year was a robust year for Marriott’s pipeline expansion. It signed 726 management and franchise agreements, representing nearly 108,000 rooms. About 20 percent of these deals were conversions rather than new development.
Marriott joins other hotel companies in having a backlog of getting signed hotels built open. Last year, the company only added 394 properties, representing roughly 65,000 rooms, growing its worldwide network by 4.4 percent. But given the enormous size of its pipeline, that rollout could’ve been faster if key inputs for construction and financing hadn’t been disrupted by labor dislocations and rising interest rates.
For more context, see how the great merging between people’s work and personal lives has led Blended Travel to Come of Age, one of Skift’s Megatrends for 2023.
“I admire so much about Stephanie — she has this great combination of grit, grace, and humanity — qualities that make her an exceptional leader,” said Marriott CEO Anthony Capuano. “To say she will be missed is an understatement.”
Linnartz led Marriott’s multibillion-dollar digital transformation. Under Armour said it was interested in leveraging her digital expertise as the company seeks to become more digitally nimble.
Some analysts will see the news of Linnartz’s departure as a message to the travel industry that if it doesn’t put women in top roles they will leave for industries that are more welcoming. Others will see it as natural that some executives may seek other jobs after long tenures and a grueling pandemic, as witnessed by IHG saying in October that it would lose its chief financial officer and long-time executive, Paul Edgecliffe-Johnson, to take a comparable role at Flutter Entertainment, a sports betting and gaming operator.
Linnartz has been president of Marriott since 2021, heading the company’s brand, marketing, sales, revenue management, customer engagement, digital, information technology, emerging businesses, and loyalty. She also oversaw the strategic growth of the company’s lodging brands.
“It has been one of the most significant and best experiences of my life to build a career at Marriott,” said Linnartz.
Below is a video of Linnartz talking about her work on adapting technology for the strategic needs of a hotel giant at Marriott during the Skift Tech Forum in San Francisco in 2019.
Marriott International said on Wednesday it would buy the City Express hotel portfolio from Mexico-based Hoteles City Express for $100 million, as the hotel giant sought to push further into Latin America.
The deal includes 152 hotels across five brands, most prominently City Express, and will boost Marriott’s footprint in the Caribbean and Latin America by 45 percent — to 486 properties across brands.
“We’re excited to enter a new lodging category — the popular affordable midscale segment where we see significant potential,” said Anthony Capuano, CEO of Marriott International.
The deal could close between the end of 2022 and the first half of 2023.
All owned and leased hotels will sign long-term franchise agreements with Marriott, while franchise agreements for co-invested, franchised and operated properties will be assigned to Marriott, with the option to sign a new contract. Marriott estimated franchise fees at about $10 million.
Most of the portfolio is in Mexico, but some hotels are in Costa Rica, Colombia, and Chile.
“At around $6,000 per room, this is a decent price,” said analysts at Bernstein in a report. “This makes Marriott the clear number one in Latin America (overtaking Accor).”
The lodging giant said it saw an opportunity to expand the brand, first in Central America and then in Latin America and possibly worldwide. It plans to add the “by Marriott” tag to the City Express brand as an endorsement.
“However, Hilton and IHG created their Americas focussed mid scale brands (Tru and Avid) organically and were able to grow them rapidly with entirely 3rd party capital and entirely new builds (no conversions),” Bernstein said. “Some of Marriott’s acquired hotels will be 20 years old. The [City Express] pipeline is just 5% of current supply.”
It was a day of validation for Luis Barrios, who founded Hoteles City Express in 2002.
Google Travel’s flight and hotel offerings gained the most desktop traffic market share in the U.S. during the pandemic while Tripadvisor lost the most on a percentage basis, according to Similarweb’s June data.
“Google Travel now owns one-fourth of all (U.S.) desktop visits to top travel sites,” Similarweb said.
In its earnings call about second quarter financials Tuesday, Google said travel and retail were the drivers of its advertising revenue during the period.
The following chart shows Google Travel’s U.S. desktop market share increased 6 percentage points to 24 percent in the first half of 2022 compared to the first half of pre-pandemic 2019.
U.S. Desktop Market Share Traffic Gains/Losses H1 2019 Versus H1 2022
“Booking has also gained 2 percentage points of share in the U.S., and only Kayak (-1 percentage point), Delta (-4 percentage points), and TripAdvisor (-5 percentage points) have lost share,” Similarweb said.
There are two points to keep in mind: These numbers don’t include traffic from mobile devices, and traffic to Google Travel often gets sent along to online travel agency advertisers.
This event is on a smaller scale, as according to a report by DataBreaches the incident, which took place in June, saw an as-yet unidentified group claim they used “social engineering” — where hackers trick someone into performing an action or divulging confidential information — to access a computer at the BWI Airport Marriott Maryland.
The hotel is described as “modern, convenient and superbly situated” and is a popular layover for flight crews — leaked documents include reservations made by airlines for their employees.
Names and details of other guests, including credit card information used to make bookings, have also been leaked, and Marriott is reportedly notifying up to 400 individuals of the attack, although it’s unclear if they are mostly guests or Marriott’s own staff.
“Marriott International is aware of a threat actor who used social engineering to trick one associate at a single Marriott hotel into providing access to the associate’s computer. The threat actor did not gain access to Marriott’s core network,” a Marriott spokesperson told TechCrunch.
UPDATE: In a statement to Skift on Thursday, a Marriott International spokesperson said:
“Marriott International is aware of a threat actor who used social engineering to trick one associate at a single Marriott hotel into providing access to the associate’s computer. The threat actor did not gain access to Marriott’s core network. Our investigation determined that the information accessed primarily contained non-sensitive internal business files regarding the operation of the property. The incident was contained to a short period of time. Marriott identified and was investigating the incident before the threat actor contacted the company in an extortion attempt, which Marriott did not pay. The company is preparing to notify 300-400 individuals regarding the incident. Marriott has also notified law enforcement and is supporting their investigation.”