Falling interest rates and better overall conditions for construction have set up the global hotel brand companies for a new wave of growth heading into 2025, and many brand executives say they're seeing strong activity and record pipeline numbers.
During the recent earnings season, hotel brand companies shared updated pipeline and unit growth figures. Here is the latest data and commentary for some of the major hotel brand companies.
Tony Capuano, President and CEO, Marriott International
“We're thrilled with our development activity. In the third quarter, we added around 16,000 net rooms, reaching more than 1.67 million rooms at nearly 9,100 properties around the world. Global signing activity has remained strong with more than 95,000 organic rooms signed year-to-date in 2024. Compared to a quarter ago, our pipeline grew 5% to a record 585,000 rooms.
“Our momentum in conversions, including multiunit opportunities, continues to reflect owner preference for our brands worldwide. In August, we announced a multiunit conversion deal with Sonder for 9,000 existing rooms and a few thousand more in the pipeline. This deal expands our portfolio of longer-stay accommodations in key global markets, including New York and Dubai. In the third quarter, conversions represented over 30% of room additions and over 50% of signs.
“In October, we announced City Express by Marriott as the brand name of our new transient midscale product here in the U.S. and in Canada. With its highly effective operating model [and] an outstanding value proposition we have already received extensive interest from ours. We expect to have signed agreements and even a few openings over the next few months. Our progress in the midscale space around the world has been outstanding, and we look forward to meaningfully enhancing our presence in this high-growth segment of the market.
“Our strong 2024 net rooms growth and signings performance is exciting, and I'm proud of our associates for their work in driving preference for our brands among both guests and owners.”
Geoff Ballotti, President and CEO, Wyndham Hotels & Resorts
“We grew our system 4%. We increased both our U.S. and international royalty rates, and we significantly grew our ancillary fee streams. Year to date, we've generated over $265 million of adjusted free cash flow, and we've returned nearly $380 million to our shareholders. We sustained strong momentum on the development front, opening over 17,000 rooms, bringing our year-to-date total to more than 48,000 rooms globally, up 13% compared to a year ago.
“We also improved our global franchisee retention rate by 40 basis points year-over-year. Notably, our franchise sales teams here in the United States signed an impressive 10% more deals in the quarter than they did last year, contributing to the 17th consecutive quarter of growth in our global development pipeline, which increased nearly 5% year over year to a record 248,000 rooms.
“Domestically, net rooms grew sequentially and year over year, driven by a solid 3% net room growth in our midscale and above brands, with new conversions like the Wyndham Bloomington adjacent to the Mall of America in Minnesota and the Wyndham Garden Louisville East near Churchill Downs, the home of the Kentucky Derby.”
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“Internationally, we grew net rooms by 2% sequentially and by 8% versus prior year. Our EMEA team grew net rooms by 11%, adding several new destinations like the stunning new Dolce by Wyndham Resort in Spain's renowned Penedès Wine Country outside of Barcelona and the Days Inn by Wyndham, Arnavutkoy near Istanbul's main international airport.
“Our EMEA team also signed a multiunit deal to introduce the Microtel brand to India with plans to open 40 new Microtel hotels by 2031, this represents our eighth Wyndham brand in India, where we currently have 60 hotels and expect double-digit net room growth over the next several years.
“Our EMEA development pipeline grew 10% year-over-year and now represents an average fee PAR 15% above the current portfolio.
“Our Latin America team similar to our EMEA team grew net rooms by 11% in the third quarter and increased its development pipeline by 16% with an average fee [per available room] now nearly 20% higher than its current portfolio. It added several new destinations.
Mark Hoplamazian, president and CEO, Hyatt Hotels Corporation
"On the outlook for net rooms growth, [there's] a few things that I want to note. The first is our gross openings this year are expected to be over 6% — lower than our expectations because of slippage of over 2,000 rooms into 2025. Part of that is hotels that are under construction that slipped for openings or that we expect to slip, I should say. We're not at the end of the year yet, so who knows, they may be pulled forward. And some conversion deals that we've been working on that aggregate up to significant number of rooms. So that's the first development I would say from our last update.
"The second is that attrition of rooms came in higher than we expected. It's approaching something like 1.5% this year, which is significantly higher than our typical run rate, which has been between 0.5 and 1%. And some of that difference, about 40% of that difference, has to do with brand standard and market-specific issues that affected our renewal or agreement to move forward with certain hotels in our portfolio. Some of it is markets that have become, I would say, more challenging, or where the central business district has moved, and we are looking for new representation. In a couple of cases, [it is] owners that we didn't come to agreement with on bringing hotels to brand standards. So part of that has to do with just discipline and maintaining standards and elevating the quality of our portfolio. And a few hotels with larger room counts that were conversion hotels expected to open this year that came out. The overall momentum, though, remains intact, and we're looking into a first quarter of 2025 where gross openings are tracking to a year-over-year net rooms growth of over 6%. And while, of course, we might experience slippage out of the first quarter, there's no systemic or structural gap to our outlook for organic growth in the range of 6% going forward.
"There are three other things that I thought I just mentioned quickly. First, this is supported by significant ongoing growth of our pipeline and increasing construction starts and improving conditions for hotel development generally. Second, we've had a significant level of conversions that have benefited us over time, especially in the last several years, and we expect to engage in conversions portfolio deals and like in the future. That activity is not included in this organic growth outlook I just gave you. And third, we are not including affiliation arrangements or rooms that are associated with affiliations or other so called 'units,' whether they be residential affiliations or loyalty partnerships or whatever the form may be."