Marriott International will invest $800 million to develop five all-inclusive resorts and launch a dedicated platform to sell these as it looks to tap into growing demand for all-inclusive holidays.
Global hospitality group Marriott revealed a 65% fall in profits for the three months to June this week as it gave notice it would “vigorously defend” itself against imposition of a £99 million ($126 million) fine by the UK Information Commissioner’s Office (ICO).
Marriot will operate the all-inclusive resorts under its luxury Autograph, Ritz Carlton, Westin and Marriott brands and market these under its Marriott Bonvoy travel programme.
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The first of the five, a 650-room resort in Punta Cana in the Dominican Republic, is scheduled to open in 2022.
The others are planned to open in Mexico in 2023 and 2025. The resorts will be a mix of “new build properties and conversions of existing resorts” including properties already in the Marriott portfolio.
Marriott echoed airline group IAG in insisting it would contest the ICO fine under the EU General Data Protection Regulation (GDPR) for a breach of the reservations database of the group’s Starwood subsidiary, revealed last November.
The ICO gave notice of the fine last month. The personal data of up to 383 million guests was accessed in the breach.
Marriott remains unable to quantify the exact numbers but reported that details of more than nine million payment cards were stolen along with 5.25 million unencrypted passport numbers.
In a second-quarter results statement this week, Marriott said: “Marriott has the right to respond before the amount of the fine is finally determined and a fine issued. The company intends to vigorously defend its position.”
Marriott reported a net profit of $232 million for the second quarter to June, down 65% on the same period last year despite a 1% increase in adjusted operating profit year on year.
The group reported an operating profit for the quarter of $409 million, down 50% year on year, with revenue of $5.3 billion 2% down on last year.
The company repurchased shares worth $500 million in the quarter, taking its total shares repurchase for the year to date to $1.6 billion.
Marriott added 112 new properties and more than 16,000 rooms in the three months and reported 213,000 rooms under construction at the end of June out of almost half a billion in its development pipeline.
The group’s debt at the end of quarter stood at $10.4 billion, more than $1 billion up on the previous year.
Chief executive and president Arne Sorenson described the results as “solid” and the three months as “the strongest single-quarter performance since late 2016”.
Sorenson said: “Year to date, we have returned $1.9 billion to shareholders. For the full year 2019 we expect cash returned to shareholders through share repurchases and dividends could approach $3 billion.”
