Marriott International, Inc. MAR unveils plans to bolster its luxury portfolio with the conversion of three iconic properties across the United States. The Resort at Pelican Hill (Newport Beach, CA), Turtle Bay Resort (Oahu, HI) and a Midtown Manhattan luxury hotel will all join the Marriott Bonvoy portfolio. These conversions are expected to be finalized this summer, adding over 1,000 rooms to Marriott Bonvoy’s already extensive luxury brand portfolio.
These conversions solidify MAR’s commitment to growing its footprint in the high-demand luxury hotel market. This focus on luxury hotels strengthens the company’s position as a leader in this key customer segment. With more than 510 open luxury hotels and another 234 in the pipeline, MAR is well-positioned to maximize the potential of its owner partners’ projects.
Conversions in Detail
The company’s luxury conversions stretch from Manhattan to Hawai’i. In New York City, a luxury hotel will join the Marriott Bonvoy portfolio on Jun 5. It is centrally located in Midtown Manhattan near popular attractions like Central Park and Times Square. This property benefits from proximity to renowned attractions and marks the much-anticipated return of The Luxury Collection brand to New York City.
In Newport Beach, California, the five-star Resort at Pelican Hill will become part of Marriott’s luxury portfolio on Jul 1. This 504-acre property boasts ocean views and a prestigious golf club. The resort will initially be managed by Marriott and is expected to be converted to a St. Regis Hotel at a later date. The Irvine Company will retain ownership of the property.
On the North Shore of O’ahu, Hawai’i, Turtle Bay Resort is set to join The Ritz-Carlton brand portfolio later this summer. This sought-after hideaway offers oceanfront bungalows and access to seven secluded beaches.
MAR aims to deliver exceptional service and experiences for global guests seeking these remarkable destinations. The company is optimistic about its luxury segment and focuses on strengthening and growing its pipeline for future growth. Currently, luxury hotels make up 10% of existing and pipeline rooms.
Focus on Expansion
Marriott is consistently trying to expand its presence worldwide and capitalize on the demand for hotels in international markets, especially in Asia, Latin America, the Middle East and Africa. The company plans to expand its global portfolio of luxury and lifestyle brands significantly. On May 28, 2024, the company’s luxury brand, Ritz-Carlton, announced the debut of Ritz-Carlton Reserve property in the Middle East under the name of Nujuma.
Meanwhile, Marriott is focusing on hotel conversion opportunities to mitigate the impact of construction delays caused by the pandemic. In first quarter 2024, conversions represented 30% of room signings. The company expects positive development trends to continue on the back of new development and multiunit conversion opportunities.
As of Mar 31, 2024, the company had a total of 8,861 properties (or 1,643,172 rooms) worldwide, up 6.1% year over year from 8,353 properties (or 1,534,072 rooms). During the first quarter of 2024, Marriott added approximately 46,000 net rooms, including 37,000 rooms, under its agreement with MGM Resorts International. As of the first quarter, MGM collection with Marriott Bonvoy has 16 properties in Las Vegas and other key cities of the United States.
At the end of the said quarter, Marriott’s worldwide development pipeline totaled 3,419 properties, with nearly 547,000 rooms. Also, more than 202,000 rooms in the pipeline were under construction as of the end of Mar 31, 2024.
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Shares of this global hospitality company have surged 29.9% in the past year compared with the Zacks Hotels and Motels industry’s 23.8% growth. It is benefiting from solid leisure demand and recovery in business transient and group demand accompanied by its focus on the compelling loyalty program, The Marriott Bonvoy.
Zacks Rank & Key Picks
Marriott currently carries a Zacks Rank #3 (Hold).
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