“Generally I think the American consumer is strong,” Marriott President and CEO Arne Sorenson told Yahoo Finance when asked how the trade tussle between the two superpowers is impacting the hotelier. “Our hotels are performing well in China.”
That’s good news for Marriott’s investors, which are banking on Sorenson delivering high returns on its significant number of investments. Marriott told Wall Street several months ago it will add a whopping 275,000 to 295,000 new rooms by 2021. Those rooms are expected to add $400 million in sales and bring earnings to a range of $7.65 to $8.50 a share by 2021.Marriott’s adjusted earnings in 2018 tallied $6.21 a share.
In total, Marriott has more than 2,800 hotels in its development pipeline representing about 475,000 rooms. That’s by far the most aggressive development pipeline in the hotel industry.
And China — where Marriott works with local Chinese real estate developers — is a key focus by Sorenson. The company has 310 deals signed for new properties in China. Marriott currently operates 346 properties in the country.
All of this isn’t to say, however, that Marriott is 100% immune to a trade war that could very well extend into 2020.
The trade war “has driven anxiety levels up a little bit” among corporations, Sorenson acknowledged. “I think the Chinese are increasingly cautious about coming to the United States for travel because of the noise around the relationship,” added Sorenson.