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main concurrent buckets of expenditure , as Oberg outlined . Its biggest is a multiyear technology rehaul of its PMS and loyalty systems , which Oberg said would be reimbursed over time . “ Elements of the tech transformation will start to roll out later this year ,” Capuano said , adding that reconstituted tech platforms will not only benefit customers but help employees do their jobs far easier . “ There are far-reaching impacts to this transformation , starting with Marriott associates , with the simplicity and the streamlined training that we think will be a big advantage as we go out and try to attract best-in-class |
talent ,” he said , adding that for owners there are advantages on both the revenue and expense side . “ We expect there to be enhanced efficiency .”
The second bucket is spending for its own lease portfolio , which is expected to be above historical levels in 2025 with about half of the expected investment driven by the completion of renovations on the Elegant Hotels portfolio in Barbados , a portfolio that Oberg said Marriott expects to sell once the renovations are completed , subject to longterm contracts to remain in the Marriott system . The last bucket is expected investment in contracts , largely for new units “ as we continue to expand our
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global portfolio ,” Oberg said . Late last year , Marriott announced an initiative “ to enhance effectiveness and efficiency ” across the company with expected resultant savings of $ 80 million to $ 90 million annually beginning in 2025 . It meant the layoffs of more than 800 corporate employees at its Bethesda , Md ., headquarters as part of a company-wide restructuring . The layoffs were effective January 3 , 2025 . Asked if the restructuring had yet reaped any benefits , Capuano said there is energy across the enterprise “ about how streamlined our decisionmaking will be as a result of this , particularly in the field .” |
Marriott said it will also continue to use its balance sheet to hunt and secure deals by dangling key money , which it uses on about a third of all deals . “ We ’ ve got lots of financial tools in our toolbox for those deals that we think will provide outsized volumes of fees ,” said Capuano . “ The competitive landscape has really shifted toward key money being the tool of reference . As we look at trends , we are seeing a bit more key money required across more tiers , meaning we ’ re seeing it used in lower chain scales , which is a bit of a new development .” Capuano added that they are deploying slightly less key money per deal . |
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