Marriott Makes Room for Chinese Clients

Marriott International Inc. has plenty of swanky hotels in New York, Boston and by its headquarters near Washington. But it eschewed such predictable locations for analyst presentations last month and instead held the meetings in Shanghai and Beijing. The locales were fitting, and not just because the company plans to nearly double its hotels in China to 100 by 2014. Chinese customers represent a huge opportunity, both in China and the U.S., for the operator of 643,196 rooms world-wide. China won't figure big when Marriott on Wednesday reports second-quarter results. Analysts expect it to post earnings of some 42 cents a share, compared with 37 cents a year earlier. Those numbers are adjusted for Marriott's 2011 spinoff of its timeshare unit. Shares in that business are up 80% year to date, while Marriott International is up 31%. But Marriott's Chinese focus is a large part of its longer-term appeal. Rising wealth and expedited visas mean an estimated 1.1 million Chinese visitors to the U.S. last year should rise threefold by 2016, according to Commerce Department estimates. Marriott's partnership with leading Chinese travel site Ctrip.com and the launch of its "Li Yu" hospitality program are the latest steps. Li Yu means "serve with courtesy" in Mandarin. Marriott already has a 9% market share in North America, which will be a big destination for Chinese tourists. But it wants to keep investing to tap key growth areas such as the Chinese visitors. Barring a serious recession or other hit to travel, it appears to have ample cash to do that. That is largely thanks to its policy of "capital recycling." For example, Marriott projects that, on top of $3.6 billion to $3.8 billion in cash flow from operations through 2014, it will recycle as much as $1 billion in capital by bringing outside investors into projects it has developed. Over the same period, the company plans investments of $2.6 billion to $2.8 billion, some three-quarters of it on new units, while growing by 90,000 to 1 05,000 rooms. The company projects this will leave it with up to $2 billion in free cash to distribute to shareholders. While Marriott owns hardly any of the rooms it manages, it seeks to own the future of cross-border tourism. That clearly lies across the Pacific. Source: Wall Street Journal from China Travel & Tourism News http://www.chinatraveltourismnews.com/

Put the internet to work for you. via Personal Recipe 701383