Americas Swan launching soon: Marriott warns that corporate travellers have a growing preference for Canada

Marriott International is ratcheting up rhetoric against the administration of US president Donald Trump, warning business travellers are opting for Canada as negative perception of the US builds.

Arne Sorenson made those comments in a recent interview with Bloomberg. In 2Q2017 Marriott stated systemwide occupancy exceeded 78%, and Hawaii, Orlando, Toronto and Montreal reported robust RevPAR (revenue per available room) gains.

It’s not first time Mr Sorenson has spoken out about Mr Trump’s policies. After Mr Trump won the US presidential election in Nov-2016, Mr Sorenson wrote the president elect an open letter on social media site LinkedIn.

“Strengthening our borders, however, should not lead us to close America to travelers from around the world. The 75 million foreign visitors we welcome every year support in excess of two million jobs in the U.S.,” Mr Sorenson explained to Mr Trump. “Those jobs cannot and will not be transferred off shore – unless, of course, we dissuade those travellers from coming to the U.S. We should keep the welcome mat out for foreign travellers.”

Mr Sorenson told Bloomberg larger groups of travellers, particularly for conferences, are changing their reservations to friendlier cities such as Toronto.

During Mr Trump’s ten months in office he has attempted to institute travel bans for several countries, and those edicts have been constantly challenged in courts. In Oct-2017 a federal judge blocked the latest version of the controversial ban.

Mr Trump has upped his efforts to alter US immigration policy after a suspect from Uzbekistan allegedly drove a truck on a bicycle path on 31-Oct-2017. He is urging the US Congress to cancel a visa lottery programme the suspect used to enter the country.

Mr Trump’s heightened anti-immigration rhetoric in the wake of the attack will continue to fuel growing uneasiness about travel to the US. Data from the US Travel Association show that while international inbound travel increased to the US in Aug-2017, “the Leading Travel Index (LTI) continues to project a tepid outlook for international inbound travel, which will trail the domestic market through the beginning of 2018”.

The association’s current travel index (CTI) shows huge declines in inbound international travel during the height of the administration’s efforts to institute travel bans early in 2017. The six month CTI average at the end of Aug-2017 was 49.7, which is considered a contraction of growth.

“A variety of factors will continue to weigh on the [international] sector’s growth, including a strong dollar, global instability and the unintended consequences of Trump Administration security policies,” the association concluded.

Latest data from benchmarking experts STR actually shows the US hotel industry reported positive year-over-year results in the three key performance metrics during the week of 22-28-Oct-2017. In comparison with the week of 23-29-Oct-2016, the industry recorded a +4.0% rise in occupancy to 69.8%, a +2.6% growth in ADR to USD129.44 and a +6.7% increase in RevPAR to USD90.32.

Among the Top 25 Markets, Houston, Texas, reported the largest year-over-year increases in occupancy (+34.9% to 85.9%), ADR (+14.0% to USD120.89) and RevPAR (+53.8% to USD103.82). It is clear that post-Hurricane Harvey demand continues to drive performance levels in the market. Tampa/St. Petersburg, Florida, experienced the second-highest increase in occupancy (+13.4% to 77.7%) and the second-largest rise in RevPAR (+23.9% to USD94.42) during the period.

Overall, nine of the Top 25 Markets reported double-digit RevPAR growth, according to the STR analysis snapshot, with Detroit, Michigan, the only other double-digit increase in ADR (+12.2% to USD112.31). At the other end of the spectrum, New Orleans, Louisiana reported the steepest decline in RevPAR (-20.1% to USD122.73), due primarily to the week’s only double-digit drop in occupancy (-13.0% to 73.5%). Two markets reported decreases in ADR: Chicago, Illinois (-8.9% to USD155.91), and New Orleans (-8.1% to USD166.91).

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