BETHESDA, MARYLAND Marriott International Inc. has surpassed rival Wyndham Worldwide as the second largest hotel company in the world, behind IHG.
Marriott, which finished 2009 just 2,200 guestrooms behind Wyndham, now has approximately 3,500 guestrooms more than the Parsippany, New Jersey-based company. The figures are based on estimates in each company’s fourth quarter earnings reports.
For the fourth quarter, Marriott reports higher worldwide RevPAR of 8.1%, coupled with an increase in ADR of 2.3%.
Marriott’s fourth quarter adjusted diluted earnings per share totaled US$0.39, a 22% increase over prior year adjusted results. Total fee revenue increased 14% from the year-ago quarter to US$389 million, while total incentive management fees climbed 27% percent. North American incentive fees increased 50%.
The company rolled out a new revenue management system at a total cost of US$270 million, designed to manage and price group rooms and catering business at North America full-service hotels—technology the company says “will be a significant competitive advantage.” The system rollout began in the fourth quarter of 2010 and the company expects it will be implemented at nearly 500 hotels by mid-2013, with more properties to follow.
Marriott funded the revenue management system cost as it was developed, expecting to recover the cost from individual hotel properties over time. However, due to the significant impact of the recent recession on hotel owner profitability and the long-term nature of its relationships with its owners and franchisees, in the fourth quarter Marriott agreed to absorb a portion of the cost. As a result, the company recorded a US$84 million impairment charge on the investment in the fourth quarter to reflect the expected levels of cost recovery.
At year-end, Marriott’s worldwide pipeline of hotels under construction, awaiting conversion or approved for development totaled nearly 105,000 guestrooms, including nearly 45,000 guestrooms outside North America. The pipeline includes AC Hotels by Marriott, a new brand with over 9,000 guestrooms expected at launch in 2011.
More than 8,500 guestrooms opened during the fourth quarter, including 1,800 guestrooms converted from competitor brands and 2,100 guestrooms in international markets.