Marriott International hosted its annual shareholder meeting Friday, hitting the company's high notes throughout 2015 while looking to future developments. Arne Sorenson, the company's president & CEO, spoke on Marriott's growth, goals and more, and the company's merger with Starwood Hotels & Resorts Worldwide was top of mind. Here are five key takeaways from the call.
1. The Starwood merger is coming on fast
From the moment the call began, Starwood was on the tip of everyone's tongues. Sorenson began his address by reflecting on the November announcement to acquire Starwood, as well as the overwhelming vote to approve the merger from the boards of both Marriott and Starwood. Following the approval of international regulators, Sorenson said the deal should be closed mid-2016.
"This greater scale should offer a wider choice of brands to consumers, improve economics for owners and franchisees, increase our unit growth and enhance long-term value to shareholders," Sorenson said. "Today is the start of an incredible journey for our two companies."
"I never imagined 60 years ago when I opened our first hotel that I would be a part of the largest and most powerful hotel companies in the world," said Bill Marriott, executive chairman and chairman of the board of Marriott International. "The Starwood transaction is the most significant transaction our company has ever completed."
2. "Growth" is the magic word
Later in the call, during the question-and-answer phase, Marriott admitted that his strategy for the company has always boiled down to one word: More. Knowing this, the company's performance numbers during 2015 make a lot of sense.
Marriott added 300 hotels to its portfolio last year, representing nearly 52,000 rooms. On top of that, the company's development pipeline consists of 1,663 properties, representing more than 270,000 rooms.
Much of the company's growth has been international. Marriott is the largest hotel operator in Africa, bolstered by its deal with Protea Hotels. Marriott wants to expand Protea's footprint in Africa from 10 to 16 countries by 2020, and has hotel set to open in Kigali, Rwanda, in 2016 as the largest hotel in the country.
"This tremendous growth couldn't have come about without pushing ourselves outside of our boundaries," Sorenson said.
But that's not all. Marriott is nearly finished integrating its newly acquired Delta Hotels brand, and has plans to take the brand on the road outside of Canada. The process already started with the opening of the brand's first property in Orlando.
In the U.S., Marriott opened 24,000 new rooms during 2015, and ended the year with a 27-percent share of all hotel rooms under constructions in the country. Furthermore, Marriott opened its first Edition hotel in New York City, and opened four new AC Hotels properties after bringing the brand stateside in 2014.
3. Technology is a priority
Sorenson took a short but crucial moment during his speech to mention the place of technology in the hotel space. Specifically, he highlighted the importance of the mobile market and the need for stronger, more reliable Wi-Fi across all Marriott hotels.
"We were the first hotel to offer mobile check-in and check-out across our whole portfolio," Sorenson said. "We have and will continue to invest in the technology our customers want, embracing everything mobile."
4. The loyalty push is big
Marriott began its direct bookings push in 2015 with renewed campaigns promoting its loyalty program. According to Sorenson, Marriott's reward program, along with Ritz-Carlton Rewards, has grown to 56 million members.
Later in the call, Sorenson was asked if and how the Starwood Preferred Guest loyalty program would be factored into the existing Marriott Rewards, and Sorenson clarified that there are plans to eventually have these two offerings become one and the same. In the meantime, Marriott and Starwood are working together to determine how to best combine the programs so rewards members retain their benefits while getting the best of both worlds.
"It's not surprising that Marriott Rewards folks are loyal to Marriott, Starwood folks are loyal to SPG, etc.," Sorenson said. "We want to make sure their current benefits, what they like, are protected. We want to work with them to develop better travel."
5. Marriott is sticking with its strengths
When asked if the company will shift to begin owning any of the hotels in its pipeline, Sorenson was doubtful. Rather than own hotels, particularly in international markets, Sorenson would prefer real estate professionals do what they do best while Marriott does the same.
"We have roughly 4,500 hotels in our system. We own less than 10, and those are all for sale," Sorenson said. "We are not long-term holders of any real estate. Our plan all over the world is to grow with local partners. We don't have any expertise in that field. To be a real estate developer in China or Africa is a local owner's game, and we leave it up to them."