Consumer Nation

The Business Traveler Is Back, Marriott Says

The business traveler is back and that's good news for hotel operators like Marriott International, which recently saw its same-store revenue rise for the first time in more than a year.


But it could be bad news for consumers, as last year's sweet deals on vacation hot spots may not be as plentiful.

In an interview with CNBC, Marriott President and COO Arne Sorenson said the picture today is very different from a year ago, when "business travellers were stuck in their offices, worried about their jobs, worried about their balance sheets."

"Those business travellers are back on the road," he said. "It doesn't mean that from now on it's always going to be up, but it is at least turning a corner and showing signs of life, I suppose."

Business travellers tend to pay higher rates for rooms and services while at hotels. They also drive business for conference and meeting room space at hotels.

According to Sorenson, many businesses are starting to make more frequent visits to sales accounts and once again sponsor events that might have been cancelled last year, or even in 2008.

Marriott President on the Consumer

The result is a "2 or 3 or 4 full points increase in the volume," Sorenson said.

But the return of the business traveler may not be good news for bargain-hungry consumers.

In an effort to fill rooms last year, Marriott and other hotel operators slashed prices to attract consumers. Now, the industry is looking to increase room rates, so there may not be as many deals.

"The retail consumer, actually for us, was stronger last year in volume terms, but they were stronger because the values were so compelling for them," Sorenson said.

Still, Sorenson said "pricing is still weak" and the company is "struggling" to drive price increases.

Overall, Sorenson said he expects consumers are pretty much acting they way they did last year. They are "cautious, but still interested in value where it is available," he said.

Even without a big uptick in the number of new jobs being created, there are "signs of life" in the economy, Sorenson said. One reason may be that consumers are starting to return to more normal work schedules, which also can have a positive impact on the economy, he said.

At Marriott, the company not only reduced its staff during the recession, but it also cut the number of hours its employees worked. Now, the company is starting to increase the number of hours employees are working.

The company also recently announced plans to double the number of rooms it operates in Europe. Sorenson said this is about increasing its market share in the region, which is the biggest lodging market in the world.

Marriott operates 40,000 rooms in Europe, and has more than 3,400 hotels in 68 countries and territories worldwide.

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