Bye bye JW Marco island

[Wanderlustgrl]

Looks like they sold another property fr the marriott system. Guess demand at crystals shores is even higher now

 

[TheTimeTraveler]

What makes you say this? The JW property was sold this month but Marriott will continue managing it as a JW (as they have for some years now).












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[Hindsite]

There are very few properties owned by the Marriott International hotels company, somewhere over 90% are owned by companies or individuals, who then franchise a brand to operate under. That means that the hotels can be bought and sold without a change to the branding, and that they can change branding without the underlying owner changing.

 

[ljmiii]

Looks like they sold another property fr the marriott system. Guess demand at crystals shores is even higher now

Whatever you read got it backwards...the JW Marco isn't leaving Marriott International just the owner of the property is changing.

Hotel ownership changes all the time. Sometimes Marriott customers notice but most of the time they don't. What matters is when the property ownership stays the same but the owner decides to leave Marriott for another chain (as happened at the hotel side at KBC).

 

[Big Matt]

There are very few properties owned by the Marriott International hotels company, somewhere over 90% are owned by companies or individuals, who then franchise a brand to operate under. That means that the hotels can be bought and sold without a change to the branding, and that they can change branding without the underlying owner changing.

It is closer to 100% than 90%. They spun off the real estate part a couple of decades ago or more. I'm sure they own their own real estate (office buildings) in Maryland, but that may not even be the case any longer.

 

[ljmiii]

There are very few properties owned by the Marriott International hotels company, somewhere over 90% ...

It is closer to 100% than 90%....

As of 12/31/21 there were all of 5 Marriott Int'l owned properties in the US and Canada - The W New York Union Sq, Westin Peachtree in Atlanta, and the Marriott and Courtyard & RI Convention Center in Las Vegas. And all of 15 overseas.

 

[dioxide45]

I find the hotel business strange. Getting into real estate is what saved McDonald's in the early days. Selling the real estate off basically killed Red Lobster (it wasn't really the Endless Shrimp promotion). Hotels brands are now only worth the value of the name. Not much more. I guess they make revenue from managing some of the properties but so many of the lower tier properties are managed by the franchisee. As is the case with MVC resorts too. A brand is only worth what people perceive it to be worth. If the brand loses favor, there goes the company. At least when you own real estate, you own an actual tangible asset.

 

[daviator]

I find the hotel business strange. Getting into real estate is what saved McDonald's in the early days. Selling the real estate off is basically killed Red Lobster (it wasn't really the Endless Shrimp promotion). Hotels brands are now only worth the value of the name. Not much more. I guess they make revenue from managing some of the properties but so many of the lower tier properties are managed by the franchisee. As is the case with MVC resorts too. A brand is only worth what people perceive it to be worth. If the brand loses favor, there goes the company. At least when you own real estate, you own an actual tangible asset.

I agree completely. But it happens because somebody comes along and sees a way to make lots of money in the short term by selling off all the real estate (and that person or more likely people stand to personally make a fortune from those transactions.) For a short time, it does wonderful things for the bottom line. But a couple of decades on, the money has largely been spent, squandered or siphoned, and the once-mighty hoteliers own little of value and are shadows of their former self, not even able to get the new owners of their former properties to follow the rules in the contracts they signed, and far more eager to retain the hotels as customers than the people who stay in them.

All the value got sucked out of these companies and they don't have much to show for it, in my view.

 

[Big Matt]

I find the hotel business strange. Getting into real estate is what saved McDonald's in the early days. Selling the real estate off is basically killed Red Lobster (it wasn't really the Endless Shrimp promotion). Hotels brands are now only worth the value of the name. Not much more. I guess they make revenue from managing some of the properties but so many of the lower tier properties are managed by the franchisee. As is the case with MVC resorts too. A brand is only worth what people perceive it to be worth. If the brand loses favor, there goes the company. At least when you own real estate, you own an actual tangible asset.

This is exactly why I invest in real estate and will never own stock in hotel/travel companies. The travel inudstry is very fickle and tied to economic cycles.