Who is staying at the most expensive Chinese hotels? (MAR)

by: Ezra Marbach

Arne Sorenson of hotel operator Marriott International (ticker: MAR) recently expressed confidence in his company's growth prospects in China. Here are key quotes to that effect from the company's Q1 2005 earnings results conference call along with a telling response to the question posed above:

....Across all our brands, our hotel results in Asia remain very strong, with China leading the region in unit growth and RevPAR improvement. Ten years ago, we had only one hotel on the entire Asian continent. Today we have 31 hotels in China, alone. During the first quarter our hotels in China reported over 20 % RevPAR growth on a constant dollar basis.

....You may be surprised domestic Chinese travelers remain the largest source market for 4- and 5-star hotels in that country. As domestic inplanements continue to grow in China, we think this will be a high growth market for a considerable period of time. Today we have a meaningful market share in China with a growing base of Marriott rewards players. As Chinese travelers venture offshore, we believe we will get more than our fair share of this business too.

(Quotes are from the CCBN StreetEvents transcript.)

Comment: Chinese domestic travel growth is good news for online travel services companies Ctrip (ticker: CTRP) and eLong (ticker LONG), It is also good news for publicly traded Chinese airlines including China Southern (ticker: ZNH) and China Eastern (ticker: CEA).