Marriott International has announced that it is continuing its partnership with UNICEF by relaunching ‘Check Out for Children,’ a program that has been created to give guests the opportunity to make a voluntary donation to the organization during their stay.
According to a release, guest donations collected as part of the program will help to fund UNICEF’s work to ‘make a better world for every child in over 190 countries and territories,’ and will power initiatives to create cleaner environments, advocate for children with disabilities, and help to protect refugees.
“Marriott is proud to continue its legacy of serving our world in collaboration with UNICEF,” said David Marriott, chairman of the board, Marriott International in a release.
“Since 1995, we have worked with UNICEF to provide much needed funding for youth health and nutrition, safe water and sanitation, quality education and skill building, and the protection and care of children in the face of natural disaster. The Check Out for Children program is an incredible opportunity for our guests and our hotels to support UNICEF’s relentless pursuit of bettering the lives of children around the world.”
Check Out for Children is being expanded in recognition of World Children’s Day, with the program now live in over 500 properties across 40 countries.
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Marriott International on Wednesday debuted Four Points Express by Sheraton, a midscale hotel brand aimed at Europe, the Middle East, and Africa.
The brand aims to target the “midscale” segment of affordable lodging. Marriott estimates that about a half-million independent or locally-branded hotels are in this segment — many of which may be ripe for conversion to a global brand.
The first hotel will be a 52-room property opening later this year in Lara, a district of Antalyain Turkey. Next year, another property in Turkey is likely to open. So is a 201-guestroom property in London near the Euston rail station.
Other hotel groups are also focusing on midscale brands, such as IHG’s Garner, Hilton’s Spark brand and an upcoming (as-yet-unnamed) extended-stay brand, and Hyatt’s Hyatt Studios extended-stay brand.
“We see no clear evidence that the actual resort fees/guest have grown materially since 2019,” wrote analysts Greg Miller and Patrick Scholes in a report. “Frankly, this was very surprising to us.”
The analysts estimate that resort fees remain “a modest” amount of total revenues, between 1 and 2 percent, based on data from HotStats, a benchmarking service.
One possible reason may be that resort fees may have become “less profitable than pre-pandemic given inflationary and labor cost pressures,” the analysts speculated.
Marriott is the first of the global hotel groups to boost pricing transparency. It alone made at least $206 million off the practice just from its self-managed resorts since 2012, according to depositions from the Washington, D.C., Attorney General’s ongoing lawsuit, which Skift reported on. But all of the major hotel groups engage in the practice.
So-called “drip pricing” continues to be a popular sales technique in travel, where a seller gets a consumer psychologically invested in an offering and then adds little additional costs without prompting the buyer to abandon the purchase.
Marriott International said on Friday it had received an okay from Mexico’s competition watchdog for its acquisition of the City Express brand portfolio from Hoteles City Express. The news clears the path for the $100 million deal, first announced in October, and which may now close before June.
The hotel group seeks entry into the affordable midscale segment by adding its 31st brand, City Express.
“We expect to grow that brand aggressively in the Latin America and Caribbean region,” said Anthony Capuano, president and CEO of Marriott, in an earnings call with analysts in February. “And, as we move toward closing that transaction, we are evaluating the applicability of that brand in other markets around the world.”
The deal includes 152 hotels with about 17,000 rooms. It will boost Marriott’s footprint in the Caribbean and Latin America by 45 percent, to 486 properties.
City Hotels said its hotel occupancy in December 2022 stood at 104.9 percent of the comparable pre-pandemic 2019 level.
“We’re thrilled about entering the appealing midscale lodging category and offering customers even more choice in the destinations they seek for both business and leisure stays,” said Brian King, president, Caribbean and Latin America at Marriott International.
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.