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									  DBTA Conference, Copenhagen
        January 12th 2006


         Graham Booker
Senior Director GSA Network Europe
        & European Consortia
       Marriott International
                 1      MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
     Agenda

• Update on Marriott International
• Update on the Global Hotel Industry
• Will the LCC phenomena impact Hotels ?
• Will new Hotels emerge focused on price?
• Will it still be profitable to negotiate hotel
  agreements ?
• If Customer loyalty is less than before will it
  effect the marketplace?
                    Humble Beginnings created a 79 Year
                    Tradition of Success
•   1927: J. Willard and Alice Marriott arrived in
    Washington DC from Utah & opened a 9 seat
    root beer stand called The Hot Shoppe


•   1953: Company stock first offered to public,
    selling out in 2 hours


•   1957: First hotel opens, the Twin Bridges
    Marriott Motor Hotel in Arlington, Virginia.


•   1968: Stock first listed on NY Stock Exchange


•   1972: JW Marriott Jr. succeeds his father as CEO, a
    position he still holds.


•   2004: The 500,000th Marriott room opens at the
    Marriott West India Quay, London Docklands.


                                              3           MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
    Marriott’s International Brands




Master GDS Chain Code “EM”




             4      MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                 Marriott International Facts


•US$20 Billion Company
•2,777+ Properties
•66 Countries
•12 Brands
•Over 500,000 Rooms
•133,000 staff
•Over 20 Million “Marriott Rewards” members

                          5      MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
             Marriott International Facts


•Marriott has over 7% of total GDS Product
•Marriott has 20%+ share of total GDS Bkgs
•In 2004 Sales exceeded US$10 Billion
•628,000 New concept Beds installed Q1/2006
•“Hotel Excellence” Agency Training
 Programme
•Most admired Company Globally in the
 Lodging Industry for the past 6 years
•CTAC & Pegasus
                      6      MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                   Selected 2006
                 European Openings

• Courtyard by Marriott, Moscow City Centre, Russia
• Renaissance Hotel, Barcelona, Spain
• Leicester Marriott, UK
• Cologne Marriott, Germany
• Rome Park Marriott, Italy
• Courtyard by Marriott, Vienna, Austria
• Courtyard by Marriott, Zurich, Switzerland
• Courtyard by Marriott, Prague, Czech Rep
• REFURBISHMENTS
• The Shelbourne a Renaissance Hotel, Dublin, 2006
• Grosvenor House ( JW Marriott Hotel), London, 2007
                              7    MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                             Marriott Worldwide Locations

Americas                                                                            80.8%
                United States                                                       (76.2%)
----------------------------------------------------------------------------------------

Middle East & Africa                                                                2.3%
                Egypt                                                               (0.6%)
----------------------------------------------------------------------------------------

Asia                                                                                6.2%
                China                                                               (2.8%)
----------------------------------------------------------------------------------------

Australia                                                                           0.5%
----------------------------------------------------------------------------------------

Europe                                                                              6.4%
                Germany                                                             (2.9%)
----------------------------------------------------------------------------------------

United Kingdom                                                                      3.8%
                                                         8                     MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                                               World Travel & Tourism 2005


     In 2005, the Travel & Tourism Industry around
     the world expects to:
     • Generate US$6,201.49 BN of economic
       activity
     • 10.6% of the total global Gross Domestic
       Product
     • 221,568,000 jobs representing 8.3% of
       total employment



Source: World Travel & Tourism Council 2005 Economic Research
                                                                9   MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                                         Worldwide Tourist Arrivals
                                                Middle East      Africa
                                                    5%            4%          Americas
                                                                               18%




                         Europe                                                           East Asia
                          55%                                                            Pacific 20%


                                                Tourist Arrivals Millions                             % Change
                                        2003              2004                 2003/04                  1996/04
 World                                  691.0             759.0                  9.8%                    27.2%
 Africa                                 31.0              33.0                    6.5                      51.2
 Americas                               113.0             124.0                   9.7                       6.0
 East Asia Pacific                      119.0             153.0                   28.6                     67.3
 Europe                                 399.0             414.0                   3.8                      18.2
 Middle East
Sources: Hospitality Trends 4/28/2005
                                        29.0              35.0
                                                         10                       20.7                    148.5
                                                                          MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
             Lodging Industry Trends – 2005


Which countries are        #                Country                      US$ mn
                           1    United States                          170,728.0

expected to spend          2    Japan                                  71,756.1

the largest amount         3    Germany                                53,365.9
                           4    United Kingdom                         43,480.1
(absolute terms) on        5    France                                 39,828.3
                           6    Italy                                  38,571.7
Business Travel in         7    Spain                                  17,488.2
                           8    Canada                                 16,755.3
2005?
                           9    Netherlands                            12,246.3
                           10   Russian Federation                       8,875.4




                      11                MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                      Lodging Industry Trends – 2005

                                                #             Country                         % Real
   Which countries                                                                            Growth

   were expected to                             1 Cambodia                                      16.9
                                                2 Venezuela                                     16.6
   grow their Business
                                                3 Lithuania                                     16.4
   Travel fastest in
                                                4 Latvia                                        16.3
   2005?                                        5 Botswana                                      15.5
                                                6 China                                         15.3
                                                7 Malaysia                                      15.0
                                                8 Albania                                       15.0
                                                9 Sudan                                         15.0
                                                1 Mali                                          14.6
                                                0


WTTC Executive Summary Economic Research 2005   12            MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                                          RevPar Performance 2005


                                         REVPAR by Region
                                   YTD July 2005 vs. YTD July 2004

                  100
                   80
         REVPAR




                   60
                   40
                   20
                    0
                          Asia Pacific         North America   Central & South   Europe           Middle East &
                                                                  America                            Africa


                                                           2004           2005




Source: Gobal Lodging Review – Deloitte and Smith Travel          13             MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
Research 8/2005
                                             ADR Performance 2005


                 ADR by Region - YTD July 2005 vs. YTD July 2004

           140
           120
           100
   ADR




            80
            60
            40
            20
             0
                     Asia Pacific             North           Central &     Europe            Middle East
                                             America           South                            & Africa
                                                              America

                                                            2004          2005

Source: Global Lodging Review – Deloitte and Smith Travel
Research 8/2005
                                                                   14            MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                              Occupancy % Performance 2005


                     Occ % by Region - YTD July 2005 vs. July 2004


                    100
                    80
           O cc %




                    60
                    40
                    20
                      0
                           Asia Pacific           North      Central &    Europe       Middle East
                                                 America      South                     & Africa
                                                             America


                                                            2004         2005



Source: Global Lodging Review – Deloitte and Smith Travel      15
Research 8/2005                                                            MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                                                                            International Travel to U.S.


                                                                                   International Arrivals to the U.S.

                                           60




                                           50
       International Arrivals (Millions)




                                           40




                                           30




                                           20




                                           10




                                           0
                                                1991   1992   1993   1994   1995    1996   1997   1998    1999   2000   2001    2002   2003   2004   2005   2006

                                                                                                    Years




Sources: Merrill Lynch At Your Leisure 1/05                                                              16                    MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
              International Economic
                  Growth Outlook

                  2004 GDP    2005 GDP Est.
 Country          % Growth      % Growth
 Australia           3.4                 3.1
  China              9.5                 8.1
   India             6.6                 5.7
  Japan              3.0                 1.6
South Korea          4.6                 3.4
  Britain            3.0                 2.4
  France             2.1                 1.9
 Germany             1.2                 1.3
  Mexico             4.4                 3.4
  Brazil             6.1                 3.8
  Canada             2.7                 3.0
                      17     MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                                    International Economic
                                        Growth Outlook
                                    Tourism 2020 Vision




Source: WTO – Tourism 2020 Vision             18      MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                                           International Economic
                                               Growth Outlook

      Corporate Chain Hotel Results per Country in Europe Total
              Over 6 Months at the End of June 2005

                                                  Chg in
                                                 Occupanc                                                Chg in
                            Occupancy             y from      ADR in     Chg in ADR       RevPar         RevPar
                               Rate                2004       Euros      from 2004       in Euros      from 2004
   Germany                       60.0%                1.4         80.9     -0.7%            48.5           1.7%
   Belgium                       65.3%                0.1         92.5     3.0%             60.4           3.1%
   Netherlands                   68.0%                1.6         96.8     -0.2%            65.9           2.2%
   Italy                         63.5%                -0.2    118.9        -0.2%            75.5          -0.5%
   United
                                 73.1%                1.0     119.1        4.5%             87.1           5.9%
       Kingdom
   Spain                         65.9%                0.2         83.9     -4.7%            55.3          -4.5%
   France                        66.4%                0.0         74.2     3.0%             49.2           3.3%
Source: Hotel News Resource – MKG consulting 7/2005          19            MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                              Travel Managers Surveyed Say...


   • 2005 travel spending is expected to exceed 2004
     levels
           – Expected increases average approximately 5%
           – Travel restrictions are still in place
           – Terror alert levels will not reduce business travel


   • Hotels are becoming tougher on pricing and
     terms for future travel


Source: Citigroup Smith Barney Midyear Update; 18 June 04   20   MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                                    U.S. Business Travel and Travel
                                       Management Insights

                 Department with Primary Responsibility
                               for Travel
      Department                                       2005       2004                  2003

      Procurement                                      30%        27%                    26%


      Finance                                          21%        30%                    32%


      Corporate Services                               18%        17%                    10%


      Administration                                   15%        14%                    16%


      Human Resources                                  10%        12%                    3%


      Other                                            6%         N/A                    13%



Source: WorldTravel BTI Annual Benchmark Survey 2005         21   MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                                      U.S. Business Travel and
                                   Travel Management Insights

  Top Travel Programme Goals (By Management Group)
                                                                            Administration
                                                                            & HR (Includes
                                                          Finance &          Corporate and
 Reason                                                  Procurement             other)           Total All
 Reduce Travel expenses                                     17%                   21%                18%
 Communicate more effectively with travellers and           10%                   16%                12%
 management

 Improve travel information and reporting                   12%                   11%                11%
 Negotiate more effectively with travel suppliers           12%                   12%                11%
 Increase travel policy compliance                          14%                   8%                 10%
 Establish/use online booking system                        14%                   9%                 10%
 Improve expense reporting and auditing processes            7%                   7%                 7%
 Update travel policy                                        7%                   7%                 6%
 Gain buy-in from senior management on                       4%                   6%                 4%
 importance of travel management

 Implement travel alternatives                               3%                   3%                 3%



Source: WorldTravel BTI Annual Benchmark            22                 MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
Survey 2005
                                    U.S. Business Travel and Travel
                                         Management Insights


      Preferred Hotel Programme Compliance
                   30%                                  27%
% of Respondents




                   25%                       22%                                   21%

                   20%

                   15%                                                 13%
                              10%
                   10%                                                                            7%

                   5%

                   0%
                                         %



                                                    %



                                                                   %



                                                                              %
                         0%




                                                                                           0%
                                     45



                                                   60



                                                              75



                                                                             90
                     <3




                                                                                         >9
                                    to



                                               to



                                                          to



                                                                         to
                               30



                                              46



                                                        61



                                                                       76



                                             Compliance Level

                                                              23                  MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                                  U.S. Business Travel and Travel
                                         Management Insights



                                         Business       94% of business
                                        Travelers,      travellers took a leisure
                                           21%          trip in 2004.

                            Leisure
                           Travelers
                           Only, 52%       Don't
                                        Travel, 27%




                              Base: U.S. Consumers



Source: Forrester Research – Business           24    MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
Traveler Behavior and Attitudes 7/05
                                   U.S. Business Travel and Travel
                                          Management Insights


                                          Fewer People, More Trips
                          64%                                                                  64%

                                                                                                                   Business
                                                                                                                   Travelers

                                                                                                                   Business
                                                                                                                   Trips
                                                      19%
                                  20%                                               17%
                                                             16%




                        Infrequent business          Moderate business              Frequent business
                      traveler (1-4 trips/year)   travelers (5-9 trips/year)     travelers (10+ trips/year)




Source: U.S. Business Travel and Travel                    25                  MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
Management Report, March 2005
                             U.S. Business Travel and Travel
                                Management Insights
                                Loyalty Programmes/Discount Programmes
                        Percentage of business travellers with memberships in these
                                               programmes

                                 47%


                                                        37%
                                            36%
                                                                         29%




                             Airline      Hotel        AAA            AARP



Source: U.S. Business Travel and Travel           26          MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
Management Report, March 2005
                          Business Travel and Travel
                            Management Insights


       Services Used on Business Trips


 Business Center

      Wireless Internet Access

                    In-room Movies

                                 Concierge

                                       Room Service

                                                  Fitness Facility

                                                      In Room Internet Access



0%            10%                20%                 30%                   40%



                                             27                      MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                 Online Statistics

• The Internet


• Bookings Online


• Brand Websites


• Projections for Online into the future



                           28       MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                                     Internet Reservations Trend

       CRO Hotel Bookings                Percent of 2004   Percent of 2003             Percent
                                          Reservations       Reservations            change 2004
                                                                                        vs. 2003
  Brand Websites                             21.90%            18.10%                     21.50%
  Retail Websites                            3.80%             4.30%                     -11.10%
  Merchant Websites                          2.60%             2.20%                      22.30%
  Opaque Websites                            2.30%             2.60%                     -12.30%
  Total Internet                             30.70%            27.10%                     13.10%
  GDS Travel Agent                           35.30%            36.50%                     -3.30%
  Total Electronic                           66.00%            63.60%                      3.70%
  Voice                                      34.00%            36.40%                     -6.50%
  Total for CRO’s                            100%              100%




Sources: TravelCLICK eTRAK results
                                                  29           MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                                           Brand Preference

   2004 Brand Preference: U.S. Business Travellers

                                                                              29%

                                                      19%

                                 5%
                                                    Preference Lead (US)
                                 4%
                                                    Business                3:2
                      3%                            Leisure                 3:1

                    3%                              Meetings                2:1


Source: 2003 Global Brand Tracking Study
                                               30      MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                          Annual Ranking of 10 Largest Hotel
                              Groups In Terms of # of Rooms

Rank     Rank                                             Hotels   Hotels       Rooms         Rooms       Rooms
                     Group                     Country                                                                  %
2005     2004                                             2005     2004          2005          2004       Change

                     InterContinental Hotels
1        1                                     UK        3,540     3,520      534,202       536,318       -2,116     -.40%
                     Group
2        2           Cendant                   USA       6,396     6,399      520,860       518,436       2,25       .50%
3        3           Marriott International    USA       2,600     2,655      478,000       479,882       -1,882     -.40%

4        4           Accor                     FR        3,979     3,894      463,427       453,403       10,024     2.20%

5        5           Choice                    USA       4,977     4,810      403,806       388,618       15,188     3.90%

6        6           Hilton Corp.              USA       2,259     2,142      358,408       344,618       13,790     4.00%

7        7           Best Western              USA       4,114     4,110      309,236       310,245       1,009      -.30%

8        8           Starwood                  USA       733       774        230,667       237,934       -7,267     -3.10%

                     Carlson Hospitality
9        9                                     USA       890       879        147,093       147,478       -385       -.30%
                     Worldwide

10       11          Global Hyatt              USA       356       210        111,474       89,542        21,932     24.50%



Source: Hospitality Trends – MKG-Consulting              31                MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                         Total Development Pipeline 1Q 05

                          New Construction and Reflagged Project
                                  and Guestroom Counts




            Marriott                  Hilton            InterCont.   Cendant           Starwood

Source: Lodging Econometrics – Projected Brand Growth       32         MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
        Will LCC impact the Hotel Industry ?

• Yes, they have already had a Positive impact, many
  Business Travellers are using LCC’s regularly


• LCC’s have opened up new source markets and
  assisted Hoteliers expand into secondary locations


• On any one day a client may spend just 1-2 hours
  onboard a LCC aircraft yet could spend 16+ in a Hotel
  so they want security, reliability, location, an
  acceptable level of business amenities, convenience
  and flexibility and in many cases before price.
• “A Home from Home “ feeling
                          33      MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
       Will LCC impact the Hotel Industry ?


•“One Stop Shop” concept helps retain
 clients & increases customer loyalty
•All successful Hotels offer realistic rates
 for the product they offer, the Hotel
 Industry is only now getting back to the
 rate levels being offered in 1999-2000.




                     34     MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
      Will Hotels emerge focused on price?


•Yes, but their is room for everyone


•Do they require something Basic !


•Or Something a little more Sophisticated!



                    35     MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
         Will it still be profitable to Negotiate
         Hotel Agreements ?

• Rate Integrity is everything


• Corporate Rates for volume business


• Discounts for Incremental revenue & market share


• Yield Management.


• Guest Satisfaction Scores

                            36    MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
      Will it be profitable to negotiate Hotel
      Agreements ?


•Discount to Unqualified Accounts


•Volume Agreements


•Best Rate Guarantee



                      37     MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
                        Best Rate Guarantees
                    Competitive Comparison Summary
                                                    Choice
                                                    • Compares Choice Hotel website rates             Intercontinental
                                                      ONLY to external internet channels ONLY         • Compares Intercontinental Hotel website
                                                    • Must submit claim 72 hours before check in        rates ONLY to external internet channels
 Hilton                                             • Match lower rate plus 10% discount                ONLY
 • Compares any Hilton channel or GDS                                                                 • Must submit claim within 24 hours of
   to external channels ONLY (not Hilton                                                                booking
   channels)                                                                                          • 4 business hours claim response to
 • Must submit claim 72 hours before check in                                                           customer
 • Match lower rate plus $50 AMEX gift                                                                • Match lower rate plus 10% discount
    cheque or $50 adjustment (outside N.A.)
                                                                       Marriott
                                                          • Flexible…compares ANY Marriott
                                                            channel to ANY external channel
Starwood                                                    OR Marriott channel
• Compares Starwood Hotel website rates                   • Most customer-friendly with claims
  ONLY to external internet channels ONLY                    submission and response process -               Cendant
• 48 hour claim response to                                  multiple ways to submit claims,                 • Compares Cendant Hotel website
  customer                                                   submit claim 24 hours before check in,            “Best Available Rates” to external
• Match lower rate plus 10%                                  24 hour response to customer)                      internet channels ONLY
   discount or 2,000 Starpoints                           • Match lower rate plus 25%                        • Must submit claim 72 hours before
                                                             discount                                          check in
                                                                                                             • Beginning May 1st “Best Rate
                                                                                                               or It’s Free’ for first night of stay
Hyatt
• Compares Hyatt.com rates ONLY
  to external internet channels ONLY
• Must call to submit claim                 Wyndham
• Match lower rate plus 20% discount        • Compares Wyndham webrates (participating hotels ONLY
                                              on Wyndham.com to external internet channels ONLY
                                            • Must submit claim 72 hours before check in
                                            • 48 hour claim response to customer
                                            • Match lower rate plus 1st night free (note: webrates are non-refundable)

                                                                      38                    MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
      If customer loyalty is less than before
      will it effect the marketplace ?

•Some Hotel Groups have Loyalty Programmes


•More Funding not Less


•People want to be Rewarded


•Outside Loyalty Programmes

                      39     MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION
   Thank you for listening.
     I am happy to take
   Questions if time permits



Confidential, copyrighted and proprietary
information of MARRIOTT INTERNATIONAL, INC. 2002

								
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