Marriott head hits out at US travel ban

The head of Marriott, the world’s largest hotels operator, has branded the US president Donald Trump’s attempted travel ban on citizens of six Muslim majority countries “not good, period”.

Arne Sorenson, Marriott International’s chief executive, was speaking after hosting the first general managers’ meeting in Dubai with employees from both Marriott International and Starwood Hotels and Resorts following their US$12.2 billion merger last year. “We have already seen travel from the Mena region to the US fall by 20 per cent since the executive order was signed,” said Mr Sorenson. “I believe the ban, if effected, would harm discretionary travel rather than business travel.”

The Trump administration’s efforts to impose the ban have been stalled by the US judiciary and the current executive order awaits an appeal hearing.

Mr Sorenson said that the ban on laptops aboard flights to the US from the Middle Easte including the UAE will affect business travel demand eventually.

Marriott is bullish about the UAE’s hospitality sector and currently has 55 hotels with another 25 in the pipeline. While there has been a softening in revenue per available room (revpar) in Dubai, with some segments falling 10 per cent in 2016, occupancy rates edged up 3.2 per cent to 79.7 per cent last year, according to STR.

The opening of three new theme parks and the canal in Dubai has also reinforced the business case for hotel operators.

“Dubai still has a tremendous momentum,” said Alex Kyriakidis, the president and managing director of Marriott International Middle East & Africa. “If one looks at the revpar, when compared with global rates, it is at remarkably high levels. It is a very profitable business with 80 per cent occupancy and $200 per night.” Marriott International now has over 5,700 properties with more than 1.1 million rooms across brands such as Ritz-Carlton and St Regis.

Mr Kyriakidis said it will use its scale and reach in the region to control fixed costs such as staff accommodation by creating compounds that could house 10,000 to 20,000 employees.

Analysts expect further consolidation in the industry globally.

“Since the Marriott-Starwood merger, we have seen many notable hotel acquisitions and investments including the Accor acquisition of FRHI and HNA acquisition of Rezidor, and more consolidation is likely in the industry in the coming years,” said Rashid Aboobacker, a director at TRI Consulting.

ascott@thenational.ae

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