Why Is Marriott Doubling Down on Africa?

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Dec. 5 (Bloomberg) –- Marriott International CEO Arne Sorenson discusses moving from NYSE to Nasdaq, the appeal of Africa as a place to expand and the Hilton IPO. He speaks with Trish Regan and Adam Johnson on Bloomberg Television's “Street Smart.” (Source: Bloomberg)

The nasdaq has had some see -- serious glitches.

What made you decide to change?

They are very persuasive.

They have been encouraging us to come over here for a number of years.

There you are, now being traded on the nasdaq.

Talk about africa.

This is a pretty big deal.

What is it that is appealing to you about africa?

In many respects what is happening in africa is like what is happening in the rest of the world.

We see governments get to a place of stability in many places.

We see the middle class grow, commerce grow.

With that, we see travel grow.

Folks in africa traveling outside.

We want to be there in be part of it.

Is this a bigger opportunity?

I think it is like emerging markets.

Sub-saharan africa will see their bleak tree hundred million folks in the next 10 years or so.

That makes it a substantial enough market to play -- pay really close attention to.

You look at latin america.

Latin america also has great growth statistics.

Why not build hotels from scratch rather than go out and pay a premium for an existing hotel operator?

Every deal we do we have a partner.

It is not an option to build 80 hotels by ourselves.

He do not know how to build hotels in that market.

That is something best done with local talent.

We are stepping in and buying the most established brand in south africa with about 100 15 management or franchise contracts in place.

We are not fighting the br -- buying the bricks.

This gives us people to manage the hotels we already have in the pipeline and continue to grow africa.

We think it is a relatively easy deal to justify.

How much did you wind up hanging?

Can you give us a ballpark?

Not until we close.

He have very detailed documents that have been signed, but we will not close until early 2014. the press has said around $14 million.

That is not a bad approximation, but we will not give details out yet.

In other words, a big opportunity because it is the primary brand right now.

Will you change it to make -- marriott?

We will keep it.

We think it is a very strong brand.

We find there are three, four, five of the existing brands that we think we can convert to our brands.

We think both create more visibility for the brands we already have in that market and probably provide list to the performance.

Under mentally it is about building the brand in using the experts they are ready have on their team.

N you actually operate 18 brands.

Another big rimmed out there, hilton, launching its ipo.

A big announcement.

Potentially 19,000,000,000- 20,000,000,000 dollars, which would make it the largest publicly traded hotel operator.

I think it is overwhelmingly good news for us.

We are pleased to have helped and come back to the markets.

A very healthy competitor of ours.

There are two things we like about this.

One is, we will get more information about them.

He are competitive, and we do want to win.

We like that we will be able to see cord early numbers from them.

It will make the hospitality space that much more relevant in the market as a whole.

I think that is a good ring.

We are excited about our business.

We want people to pay attention to our business and invest.

I think having hilton in the market will help that.

Next we did get good economic data out today.

We have hilton ipoing right now.

How would you characterize what we are going to see in the global economy and back here at home?

The globe is a big place obviously.

You start with the united states , it reveals an economy that is probably recovering.

Probably not as quickly as from prior recessionary environments, but still broadly recovering.

Most industries, most parts of the united states.

We continue -- we expect that to continue in 2014 and beyond.

We have more confidence today that europe has hit bottom and starting to move from that, albeit very slowly.

I think a year ago we would have thought is it possible they have not hit bottom yet?

We would have had less confidence about that.

In asia, china and india are less great places.

They are wrestling with local issues that are a bit different from place to place.

An optimistic tone from arnie

This text has been automatically generated. It may not be 100% accurate.


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