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Marriott (MAR) Forms Alliance With Sonder to Expand Portfolio
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Marriott International, Inc. (MAR - Free Report) has entered a long-term licensing agreement with Sonder Holdings Inc., highlighting the addition of Sonder's open and pipeline portfolio to its system under a new collection, Sonder by Marriott Bonvoy.
Takeaways From the Collaboration
Per the agreement, Marriott will welcome more than 9,000 rooms from Sonder’s portfolio by 2024 end, along with 1,500 rooms, into its pipeline. The rooms in Sonder’s pipeline are expected to be added to the company’s system over the next few years. Sonder’s portfolio primarily consists of apartment-style accommodations along with small boutique hotels operating in urban markets across North America, Europe and the Middle East.
Also, per the agreement, Marriott will receive a royalty fee based on the percentage of Sonder's gross room revenues. Notably, with the addition of more than 9,000 rooms, Marriott now expects 2024 net room growth to be between 6% and 6.5%.
The full integration of Sonder properties with MAR’s digital channels, including Marriott.com and the Marriott Bonvoy app, is expected in 2025. That said, Marriott Bonvoy members are likely to be able to earn and redeem points on their stay at about 200 Sonder by Marriott Bonvoy properties starting in 2024 end.
Marriott on Expansion Spree
Marriott is consistently focusing on expanding its presence worldwide and capitalizing on the demand for hotels in international markets. It is trying to strengthen its presence outside the United States, especially in Asia, Latin America, the Middle East and Africa. The company’s European pipeline has grown consistently in the recent past and is expected to continue going forward.
During the second quarter of 2024, global signing activity also remained robust. Record signings in APEC and Greater China increased the pipeline to more than 559,000 rooms worldwide. Conversions, including multi-unit deals, continued to drive growth as owners valued the extensive brand portfolio and revenue potential. Conversions made up 37% of openings and 32% of signings in the quarter, with hotels switching to 23 different brands in the past year.
In the first six months of 2024, Marriott added approximately 61,300 net rooms, including 37,000 rooms, under its agreement with MGM Resorts International. At the end of the second quarter, the company had a total of 8,969 properties (or 1,658,659 rooms) worldwide, up 4.4% year over year from 8,590 properties (or 1,565,258 rooms).
Image Source: Zacks Investment Research
Shares of this global hospitality company have gained 12.1% in the past year compared with the Zacks Hotels and Motels industry’s 16.7% growth. Although shares of the company have underperformed its industry, its expansion initiatives, asset-light business model and enhancements in the Marriott Bonvoy loyalty program are likely to foster growth in the upcoming period.
Zacks Rank & Key Picks
Marriott currently carries a Zacks Rank #3 (Hold).
RCL has a trailing four-quarter earnings surprise of 18.5%, on average. The stock has rallied 60.7% in the past year. The Zacks Consensus Estimate for RCL’s 2024 sales and earnings per share (EPS) indicates growth of 18.1% and 69.9%, respectively, from the year-ago levels.
DoubleDown Interactive Co., Ltd. (DDI - Free Report) presently flaunts a Zacks Rank of 1. DDI has a trailing four-quarter earnings surprise of 22.1%, on average. The stock has surged 72.2% in the past year.
The consensus estimate for DDI’s 2024 sales and EPS indicates an increase of 12.6% and 15.8%, respectively, from the year-ago levels.
Monarch Casino & Resort, Inc. (MCRI - Free Report) currently sports a Zacks Rank of 1. MCRI has a trailing four-quarter negative earnings surprise of 3.5%, on average. The stock has gained 13.8% in the past year.
The Zacks Consensus Estimate for MCRI’s 2024 sales and EPS indicates an increase of 2.3% and 10%, respectively, from the year-ago levels.
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Marriott (MAR) Forms Alliance With Sonder to Expand Portfolio
Marriott International, Inc. (MAR - Free Report) has entered a long-term licensing agreement with Sonder Holdings Inc., highlighting the addition of Sonder's open and pipeline portfolio to its system under a new collection, Sonder by Marriott Bonvoy.
Takeaways From the Collaboration
Per the agreement, Marriott will welcome more than 9,000 rooms from Sonder’s portfolio by 2024 end, along with 1,500 rooms, into its pipeline. The rooms in Sonder’s pipeline are expected to be added to the company’s system over the next few years. Sonder’s portfolio primarily consists of apartment-style accommodations along with small boutique hotels operating in urban markets across North America, Europe and the Middle East.
Also, per the agreement, Marriott will receive a royalty fee based on the percentage of Sonder's gross room revenues. Notably, with the addition of more than 9,000 rooms, Marriott now expects 2024 net room growth to be between 6% and 6.5%.
The full integration of Sonder properties with MAR’s digital channels, including Marriott.com and the Marriott Bonvoy app, is expected in 2025. That said, Marriott Bonvoy members are likely to be able to earn and redeem points on their stay at about 200 Sonder by Marriott Bonvoy properties starting in 2024 end.
Marriott on Expansion Spree
Marriott is consistently focusing on expanding its presence worldwide and capitalizing on the demand for hotels in international markets. It is trying to strengthen its presence outside the United States, especially in Asia, Latin America, the Middle East and Africa. The company’s European pipeline has grown consistently in the recent past and is expected to continue going forward.
During the second quarter of 2024, global signing activity also remained robust. Record signings in APEC and Greater China increased the pipeline to more than 559,000 rooms worldwide. Conversions, including multi-unit deals, continued to drive growth as owners valued the extensive brand portfolio and revenue potential. Conversions made up 37% of openings and 32% of signings in the quarter, with hotels switching to 23 different brands in the past year.
In the first six months of 2024, Marriott added approximately 61,300 net rooms, including 37,000 rooms, under its agreement with MGM Resorts International. At the end of the second quarter, the company had a total of 8,969 properties (or 1,658,659 rooms) worldwide, up 4.4% year over year from 8,590 properties (or 1,565,258 rooms).
Image Source: Zacks Investment Research
Shares of this global hospitality company have gained 12.1% in the past year compared with the Zacks Hotels and Motels industry’s 16.7% growth. Although shares of the company have underperformed its industry, its expansion initiatives, asset-light business model and enhancements in the Marriott Bonvoy loyalty program are likely to foster growth in the upcoming period.
Zacks Rank & Key Picks
Marriott currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Zacks Consumer Discretionary sector:
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RCL has a trailing four-quarter earnings surprise of 18.5%, on average. The stock has rallied 60.7% in the past year. The Zacks Consensus Estimate for RCL’s 2024 sales and earnings per share (EPS) indicates growth of 18.1% and 69.9%, respectively, from the year-ago levels.
DoubleDown Interactive Co., Ltd. (DDI - Free Report) presently flaunts a Zacks Rank of 1. DDI has a trailing four-quarter earnings surprise of 22.1%, on average. The stock has surged 72.2% in the past year.
The consensus estimate for DDI’s 2024 sales and EPS indicates an increase of 12.6% and 15.8%, respectively, from the year-ago levels.
Monarch Casino & Resort, Inc. (MCRI - Free Report) currently sports a Zacks Rank of 1. MCRI has a trailing four-quarter negative earnings surprise of 3.5%, on average. The stock has gained 13.8% in the past year.
The Zacks Consensus Estimate for MCRI’s 2024 sales and EPS indicates an increase of 2.3% and 10%, respectively, from the year-ago levels.