April 22 (Bloomberg) -- Marriott International Inc., the biggest U.S. lodging company, plans to add 770 hotels in the next four years as the recession spurs independent hoteliers in Europe and the Middle East to outsource management to branded chains.
“We’ve been across Europe and hotels are actually coming to us saying they want to join our brands,” Kevin Kearney, Marriott’s international hotel development vice president, said today on the sidelines of a briefing at the five-star Grosvenor House Hotel in London’s exclusive Park Lane.
Hotel occupancy has shrunk around the world as the recession causes consumers to reduce their leisure spending and companies to cut their travel budgets. Marriott plans to convert properties to brands including Ritz-Carlton and Courtyard, and has $1.5 billion of a revolving credit facility left to spend on expansion, Chairman J.W. Marriott said at the conference.
“We have a lot of liquidity and the balance sheet is strong” the chairman said. “We’re growing in spite of the economy,” he said, adding that he is obtaining new financing for projects in the Middle East, China and India.
Marriott today opened two Courtyard hotels at London’s Gatwick Airport and Twickenham, southeast England.
The Bethesda, Maryland-based company’s first Residence Inn hotel in Europe will open in Munich, Germany, in 2011. Eastern Europe is a “great opportunity”, while France, Italy and the U.K. are also earmarked for the brand, Kearney said.
“We’re really not seeing any slowdown in growth of our business,” he said. Marriott will focus on converting hotels, rather than building new ones, Kearney said.
Marriott, which opened 30,000 rooms last year, reported an unexpected fourth-quarter loss in February and said international revenue dropped 16 percent. The hotelier’s corporate credit rating was cut to BBB- from BBB by Standard & Poor’s Ratings Services, who cited declines in U.S. lodging revenue.
“They recognize we will be paying off debt,” chairman Marriott said of the rating cut. “It is the best we could do under the circumstances, we exist in today’s economy.”
The chairman said he expects the company will be out of the tourism downturn “in the next year or year and a half.”