Marriott CEO: Corporate Accounts To Become Smaller Piece Of Revenue Pie
Marriott International plans to more aggressively weed out "low-rated" corporate accounts amid high occupancies and improving corporate group demand, executives said on Thursday during the company's third-quarter earnings call.
President and CEO Arne Sorenson noted that third-quarter occupancies in North America were "nearly at record levels" and "well ahead of industry averages" and that the company during the quarter was able to replace some lower-yielding business, such as government travel, with travelers paying higher rates. As the company negotiates corporate accounts for 2014, it plans to continue that strategy.
"We're looking at how we can shift more and more of that transient business towards higher-rated segments in the hotels," Sorenson said. "We'll continue to see that our special corporate accounts shrink in terms of volume contribution to the U.S. hotels as we try to yield out some of the weaker accounts and push them more toward rack-rated business."
Occupancy at the company's upper upscale and luxury properties in North America increased by 0.8 percentage points to 73.3 percent and was above 70 percent at all Marriott brands in those tiers. Occupancy at Marriott's Autograph Collection hotels increased by 2.3 percentage points to 77.8 percent, the highest increase at any Marriott brand.