Marriott Plans to Add Hotels, Workers Amid U.S. Job Concerns
Marriott International Inc. (MAR), the largest publicly traded U.S. lodging chain, said it plans to open more hotels and add workers even as growth in its home market eases and Europe struggles with the regional debt crisis.
The Bethesda, Maryland-based company plans to hire as many as 10,000 workers in the U.S. as it opens 150 hotels in the country this year, Chairman Bill Marriott said. U.S. employers added the fewest workers in a year in May and the jobless rate rose.
“The employment numbers that came out last week were very disappointing,” Marriott said in an interview with Bloomberg Television in Hong Kong. “If people lose faith in the economy and business confidence goes down in the U.S. because of the jobs situation, it will go very soft.”
Marriott said the recovery of the U.S. economy and the European crisis are his biggest concerns for his business. Treasuries rallied yesterday, driving 10-year yields below 1.50 percent for the first time, while the Dow Jones Industrial Average erased its 2012 gain after last week’s job data. Marriott’s shares declined to a three-month low.
U.S. payrolls climbed by 69,000 last month, less than the most-pessimistic forecast in a Bloomberg News survey, after a revised 77,000 gain in April that was smaller than initially estimated, Labor Department figures showed last week. The median projection called for a 150,000 May advance. The jobless rate rose to 8.2 percent from 8.1 percent.
Marriott, which last week agreed to buy Gaylord Entertainment Co. (GET)’s hotel brand and management company, is still planning more acquisitions.
“We’ll use capital to add assets and brands to enhance our platforms,” Arne Sorenson, Marriott’s chief executive officer, said yesterday during a panel discussion at a hospitality conference sponsored by New York University.
The $210 million deal with Nashville, Tennessee-based Gaylord will add four hotels with about 7,800 rooms to Marriott’s management portfolio. Marriott is particularly seeking to add brands in emerging markets, Sorenson said.
“The developing world, including China and India, holds the greatest promise,” Sorenson said. “It’s where the economies are growing the most.”
Asia remains the bright spot for the company, Marriott, the chairman, said in the television interview yesterday, with markets including China and India driving the company’s growth. Marriott plans to add 110 hotels in the region.
He estimates growth rates of 7 percent to 8 percent for its business in China, and between 4 percent and 5 percent for Hong Kong, which he said is “not as robust.”
“Asia continues to boom,” Marriott said. “There are soft spots around the world obviously. I don’t think there will be a serious recession this time.”
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