Why Marriott is slowly expanding in international markets

Marriott in the U.S.

Marriott (MAR) mainly operates in the American region. Approximately 83% of its hotels are located in the U.S. Most of its peers—including Hilton (HLT), Hyatt (H), and Wyndham (WYN)—also have more than 80% of their hotel properties in the America region.

In the U.S., Marriott and Hilton have the highest market share. They each have 10% by the number of rooms. They’re followed by WYN’s 9%. Choice Hotel’s (or CHH) and International Hotels Group (or IHT) each have ~8%. Best Western Company and Starwood’s (or HOT) each have ~3%. G6 Hospitality, H, and LQ Management LLC each have ~2% market share.

According to management, Marriott operates or franchises one of every five new hotel rooms that opened in U.S. in 2013. It had more than 22,000 rooms under construction in the U.S. by the end of fiscal year 2013.

International market

Marriott has been expanding its presence in the international market. It added new brands in Europe, Asia Pacific, and the Middle East and African regions.

• In Europe, 27,000 new rooms and five new brands have been launched since 2010. This includes Moxy—the new affordable lifestyle brand.
• In Asia Pacific, at the end of 2013, Marriott signed agreements to add 78 new hotels and 22,000 rooms. The first Fairfield by Marriott was introduced in Bengaluru, India. There were 12 additional hotels under development in India.
• In the Middle East and Africa region, the acquisition of Protea Hospitality Holdings is expected to nearly double its operations. Its operations will be more than 23,000 rooms. In 2013, the company operated 44 hotels and 13,000 rooms in this region. We’ll discuss this more in Part 9.

Marriott is also a part of more than 70 exchange-traded funds (or ETFs). It’s part of the PowerShares Dynamic Leisure & Entertainment Portfolio (or PEJ). PEJ holds ~80% in hotels and lodging companies. It’s also part of the Consumer Discretionary Select Sector SPDR Fund (or XLY) and the PowerShares Dynamic Market Portfolio (or PWC). These ETFs hold ~20% in hotels and lodging companies.

Visit the Market Realist Hotel & Lodging page to learn more.