Marriott 2Q15 Earnings Call Notes

Now offering Netflix in room

“Speaking of entertainment, as of the second quarter, we were the first hotel company to offer Netflix programming in our guest rooms. Our collaboration with Netflix reflects changing consumer preferences in how guests want to access and watch content while they travel. ”

Don’t see RevPAR growth slowing any time soon

“there’s been a lot of discussion about the strength of demand and the pace of RevPAR growth. Undoubtedly a slower pace of RevPAR growth is likely to occur at some point in North America as economic growth matures. Trees don’t grow to the sky. In fact, you may recall, at our Analyst Meeting last year that we started our four year RevPAR growth rate scenarios with a 4% handle. While this slower pace is likely at some point, we think it is premature to call it today. Based on our data, we believe North American industry RevPAR growth will be solid for the foreseeable future”

Group bookings are very strong

“Recent group bookings are very strong. North American Full-Service Group business booked in the second quarter for all future periods rose over 8% year-over-year. In fact, meeting planners are worried about securing availability more than negotiating hard on rate.”

There’s been limited supply growth

“Supply is another common question about our industry. In the U.S., the modest pace of economic growth combined with lender caution has constrained lodging supply growth for the past five years. While construction starts are picking up, STR doesn’t expect U.S. supply will reach even the historical average growth rate until 2017”

I think we see apprehension because people are wondering how long can this upswing last, but we don’t see anything that says it shouldn’t keep going

“I think we’ve got some apprehension as a marketplace, in part maybe driven by the fact that we’re in the sixth year of a strong lodging recovery. I think all of us kind of wonder how long can it last and we’re constantly looking for clues that maybe we’re reaching a point where we can somehow say that we’re transitioning to a different phase, and I understand that. In many respects we look at the same questions and we ask the same questions here. We don’t see evidence that would suggest that we’re entering a different phase of the cycle. We see supply growth continuing to be low. We see demand growth continuing to be high. When you look at group business, when you look at pricing power, all of those things look good.”

We have a lot of respect for trip advisor and have been in a mating dance for some time

“We’ve got a lot of respect for TripAdvisor. They have built a platform for customer reviews that has tremendous strength and obviously a broad application for hotels around the world. And we have been in a bit of a mating dance with them for some period of time, sort of feeling each other out and trying to figure out how the partnership would work between us”

Overwhelmingly for airbnb you’re talking about leisure travel at lower rates than you would pay for a hotel

“Overwhelmingly in this space you’re talking about leisure travel, overwhelmingly you’re talking about travel which is at relatively lower rates than would be available in a traditional hotel. And so while there are some business travelers, probably particularly younger business travelers who use these kinds of platforms for their business travel, they are still the exception rather than the rule.”

Corporate customers area little more concerned about risk involved in staying at an airbnb

“When we listen to our special corporate and significant corporate customers, I think usually what we hear is that they would like to make sure that their people when they’re traveling are taken care of and that the risk profile is acceptable to them, and there are attractive features of hotels when it comes to those kinds of considerations”