Marriott International Announces Three Conversions to Bring Iconic Luxury Properties in the United States into the Marriott Bonvoy Portfolio Later This Summer

Rhea-AI Summary

Marriott International announced plans to incorporate three iconic luxury properties into its Marriott Bonvoy portfolio this summer. The properties include The Resort at Pelican Hill in Newport Beach, CA, Turtle Bay Resort in O'ahu, HI, and a luxury hotel in Midtown Manhattan, NYC. This move adds over 1,000 rooms to Marriott's system, enhancing its luxury segment. The New York property will join on June 5, Pelican Hill on July 1, and Turtle Bay Resort later this summer. These additions bring Marriott's global luxury distribution to over 510 hotels, with another 234 in the pipeline. The company aims to strengthen its leadership in the luxury market, offering best-in-class service and experiences to guests.

Positive

• Addition of over 1,000 rooms to Marriott Bonvoy portfolio.
• Strengthens Marriott's leadership in the luxury hotel segment.
• Expands Marriott's global luxury distribution to over 510 hotels.
• Enhances Marriott's presence in highly sought-after destinations such as Manhattan, Newport Beach, and O'ahu.
• Expected positive impact on revenue from high-end properties.
• Solidifies relationships with property owners and franchisees.

Negative

• Potential high costs associated with luxury property conversions.
• Risk of seasonal fluctuations impacting revenue in tourist destinations.
• Increased operational complexity with the addition of diverse properties.
• Dependency on sustained high demand in luxury travel market.

Insights

Financial Analyst

Marriott International's recent announcement regarding the conversion of three iconic luxury properties into their Marriott Bonvoy portfolio signifies a strategic expansion in high-demand locations. This move adds over 1,000 rooms, enhancing Marriott's already robust luxury market presence. From a financial standpoint, these conversions are likely to boost revenue through increased bookings and higher average daily rates (ADR) commonly associated with luxury accommodations.

The specific locations — New York City, Newport Beach and O'ahu — are premium markets with strong demand for luxury stays. These additions should improve Marriott's market share in the luxury segment and provide a diversified revenue stream with potential for higher profitability per room. Additionally, the continued collaboration with existing property owners like The Irvine Company and Host Hotels & Resorts may lead to streamlined operations and cost efficiencies.

Retail investors should consider the short-term benefits of increased media attention and customer interest, potentially driving a higher stock price. Long-term, this expansion solidifies Marriott's industry-leading position in the luxury segment, which could translate to sustained revenue growth and enhanced shareholder value.

Rating: 1

Real Estate Analyst

Marriott’s addition of The Resort at Pelican Hill, Turtle Bay Resort and a luxury Midtown Manhattan hotel to its portfolio is a notable development in the luxury hospitality real estate market. These properties are located in regions known for their affluent clientele and high tourism traffic, making them valuable assets. By integrating these properties into its system, Marriott not only increases its room inventory but also elevates the value proposition of its loyalty program, Marriott Bonvoy.

From a real estate perspective, properties like The Resort at Pelican Hill with its expansive 504-acre property and prime coastal location and Turtle Bay Resort’s unique oceanfront positioning, suggest significant real estate value. These locations also offer scope for ancillary revenue through amenities like golf courses and beachfront activities.

Furthermore, the strategic shift to managing instead of owning these properties aligns with Marriott's asset-light business model, which reduces financial risk and capital expenditure while enabling them to focus on brand management and customer experience. This approach can lead to higher profit margins and a more flexible business model adaptable to market changes.

Rating: 1

Market Research Analyst

Marriott's recent property conversions feed into the broader trend of consolidation within the luxury hospitality sector. By bringing these prestigious locations into the Marriott Bonvoy family, the company leverages brand recognition to attract a loyal customer base seeking premium experiences. This move is particularly well-timed as the hospitality industry rebounds post-pandemic, with consumers eager to indulge in luxury travel experiences.

The addition of these properties is likely to enhance Marriott's competitive edge against other hospitality giants such as Hilton and Hyatt. The focus on luxury properties also aligns with a demographic shift towards experiential travel, where consumers are willing to spend more for unique, high-quality experiences. This can lead to higher customer satisfaction and retention, further driving revenue growth.

Retail investors should note that while these high-profile additions strengthen Marriott's brand and market position, the success of this strategy hinges on effective management and the ability to maintain high standards of service. The long-term benefits include increased brand loyalty and a stronger market foothold in the luxury travel segment.

Rating: 1

Company Plans to Welcome The Resort at Pelican Hill (Newport Beach, CA), Turtle Bay Resort (O'ahu, HI), and a Luxury Hotel in Midtown Manhattan (New York City) to Its Luxury Portfolio

BETHESDA, Md., June 3, 2024 /PRNewswire/ -- Marriott International, Inc. (Nasdaq: MAR) announces plans to convert three iconic luxury properties in the U.S. to brands within the Marriott Bonvoy portfolio. Located in some of the most sought-after destinations in the country, The Resort at Pelican Hill, Turtle Bay Resort, and a luxury Midtown hotel in New York City are all expected to join Marriott Bonvoy's luxury brands this summer. 

"In the last few weeks, we finalized deals for conversions of three incredible properties, adding over 1,000 rooms to our system and continuing to underscore our commitment to luxury," said Leeny Oberg, Chief Financial Officer and Executive Vice President, Development, Marriott International. "We are sought out by owners because of the depth and breadth of our brand portfolio and the power of our platform to drive results. Today, the company has an industry-leading global luxury distribution of over 510 open hotels with another 234 luxury hotels in the signed pipeline. We look forward to strengthening our leadership in this important customer segment as we continue to work with owners to maximize the potential of their projects." 

Stretching from Manhattan to Hawai'i, the company's three planned luxury conversions include: 

A luxury hotel in New York, New York, is expected to join the Marriott Bonvoy portfolio on June 5. This property is located in the heart of Midtown Manhattan close to top attractions including Central Park, Times Square, The Museum of Modern Art, Rockefeller Center, the shops on Fifth Avenue, and Radio City Music Hall. This exciting addition will mark The Luxury Collection's return to New York City.

The Resort at Pelican Hill is a five-star luxury property located in Newport Beach, California, and is expected to join Marriott's luxury portfolio on July 1. The 504-acre resort sits on the coast of Newport Beach and includes the Pelican Hill Golf Club, featuring two 18-hole golf courses with 270-degree ocean views. The Irvine Company will continue to own the property, with Marriott managing, and it is expected to be converted to a St. Regis at a later date. 

Turtle Bay Resort, located on the North Shore of O'ahu, Hawai'i, is anticipated to join The Ritz-Carlton brand portfolio later this summer. A sought-after hideaway, this resort embodies the natural beauty of the island and is complete with oceanfront bungalows, lavish suites, and ocean view rooms. With seven secluded beaches within walking distance, 12 miles of hiking and biking trails, and incredible onsite amenities, the property provides guests with unforgettable experiences. Host Hotels & Resorts' purchase of the property, as well as Marriott's assumption of management of the resort, is expected to occur later this summer.

"Strengthening and growing our luxury pipeline is a top priority for the company, and I'm proud that Marriott remains the clear industry leader in the segment," said Dana Jacobsohn, Chief Development Officer, U.S. Luxury Brands & Global Mixed-Use. "We look forward to working closely with our owners and franchisees to provide best-in-class service and experiences to guests from around the world seeking out these incredible destinations." 

With an unrivaled portfolio of seven dynamic luxury brands — The Ritz-Carlton, including Ritz-Carlton Reserve and The Ritz-Carlton Yacht Collection, Bvlgari Hotels & Resorts, St. Regis Hotels & Resorts, EDITION, The Luxury Collection, JW Marriott, and W Hotels, Marriott currently has over 510 open luxury hotels and resorts in 70 countries and territories. Luxury properties currently account for around 10 percent of both Marriott's open rooms and pipeline rooms.  

Note on Forward-Looking Statements 

This press release contains "forward-looking statements" within the meaning of United States federal securities laws, including statements related to expected hotel additions and portfolio growth; our development pipeline; future growth opportunities; owner interest in our brands and platform; the power of our platform to drive results; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including the risk factors that we identify in our U.S. Securities and

Exchange Commission filings, including our most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release. We make these forward-looking statements as of the date of this press release and undertake no obligation to publicly update or revise any forwardlooking statement, whether as a result of new information, future events or otherwise.

Marriott International, Inc. (Nasdaq: MAR) is based in Bethesda, Maryland, USA, and encompasses a portfolio of nearly 8,900 properties across more than 30 leading brands in 141 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company offers Marriott Bonvoy®, its highly awarded travel program. For more information, please visit our website at www.marriott.com, and for the latest company news, visit www.marriottnewscenter.com. In addition, connect with us on Facebook and @MarriottIntl on X and Instagram.

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SOURCE Marriott International, Inc.

FAQ

What properties are being added to Marriott Bonvoy's luxury portfolio in 2024?

The Resort at Pelican Hill, Turtle Bay Resort, and a luxury hotel in Midtown Manhattan.

When will the new luxury properties join Marriott Bonvoy?

The New York property on June 5, The Resort at Pelican Hill on July 1, and Turtle Bay Resort later this summer.

What impact will the new properties have on Marriott's portfolio?

They will add over 1,000 rooms and strengthen Marriott's leadership in the luxury hotel segment.

What is the significance of adding these luxury properties for Marriott?

It enhances Marriott's market presence in top destinations and underscores its commitment to luxury.

What brands within Marriott Bonvoy will the new properties join?

The luxury hotel in New York will join The Luxury Collection, Pelican Hill is expected to convert to a St. Regis, and Turtle Bay Resort will join The Ritz-Carlton brand.