Marriott CEO: The Travel Industry Is Back
A new survey by STR finds U.S. hotel occupancy in April was at a record level (66.8%). This is no surprise to Marriott International (NASDAQ:MAR) CEO Arne Sorenson.
Sorenson told FBN’s Maria Bartiromo the hotel chain is seeing “record occupancy levels,” and the company has broken back from, and is now building over 2007 peak levels -- running from five to seven percent rev-par growth.
“We’re full from Monday through Thursday nights for business travel -- and leisure destinations on weekends, which gives us some pricing power,” said Sorenson.
Most of the demand, according to Sorenson, has been seen in the U.S.
“Only about 5% of total U.S. hotel business is international bound,” he said.
Consumer spending habits, particularly coming from boomers and millennials, and their “desire to collect experiences,” have inspired the hotel’s investments in a new set of lifestyle brands to appeal to travelers, he said.
According to Sorenson, the “U.S. hotel market is 25% bigger than it was five years ago … All hotels [in the U.S.] have been strong … one notable exception being New York.”
Sorenson is also very optimistic about travel making a comeback in Europe this summer.
“First five months in Europe have been stronger than we’ve seen in the last few years … partly because of the dollar, but mainly because Europe is climbing out of a hole,” he said. Adding that nationalism, or the desire to take vacations on home soil (particularly in Russia) rather than internationally has been a factor driving consumer demand.
Sorenson also said he doesn’t expect the strong U.S. dollar to impact earnings significantly.
“We should see American business to Europe step up because of the strong dollar, that should offset some of the negative impact we’ve seen from U.S.,” he said.