Marriott International Inc., the largest U.S. hotel chain, plans to expand by taking over the operation of hotels from competitors unable to pay or refinance debt, Chief Financial Officer Carl Berquist said.
'There's a lot of money on the sidelines to step in and take the position as an owner,' Berquist said yesterday in a telephone interview. 'We are more than willing to work with those folks and help manage or franchise those opportunities,' he said, adding that Marriott would be prepared to 'put in some equity if it makes sense to us.'
Marriott, owner of about 45 of the 3,000 hotels that carry its flag, expects conversions to help the company gain market share during the global recession. The value of hotel properties in default or foreclosure surged to $17.3 billion in the second quarter through June 24 from $9 billion at the end of the first quarter, data compiled by Real Capital Analytics Inc. show.
Marriott, based in Bethesda, Maryland, intends to add 110,000 rooms, including 30,000 this year, to its current total of about 577,000, Berquist said. About 50 percent are under construction at the chain's hotels, while 6 percent are being converted from rival brands. Most of the remaining projects are on hold as the property owners wait for building costs to drop or seek financing amid the credit crunch, Berquist said.
He declined to specify which brands were being switched over, or to estimate the number of likely conversions next year.
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Source - Bloomberg
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