Marriott (MAR) & Expedia Sign New Multi-Year Agreement

Per media report, Marriott International, Inc. MAR and Expedia Group, Inc. EXPE have signed a fresh multi-year agreement for the listing of Marriot’s hotel chains on the latter’s website. Reportedly, the negotiation began November 2018.  The deal will help travelers to make a booking at Marriott hotels worldwide through the Expedia site.

However, the rate of commission hasn’t been disclosed. The last reported rate was approximately 12%.  This is an important deal for Marriott as online booking is becoming important in the lodging business and is a major growth driver.

Markedly, this is the first deal between the two companies after Marriott acquired Starwood and became the world's largest hotel company in 2016. With the completion of this acquisition, Marriott's distribution has more than doubled in Asia and the Middle East & Africa combined. During fourth-quarter 2018 conference call, the company stated that the integration of Starwood was almost complete. Further, Marriott’s move to buy Starwood is testament to the fact that the hospitality industry thrives on such blockbuster deals.

Stock Performance

Despite the news not much movement was witnessed in the company’s shares price. However, the stock has surged 23.6% in the last three months, outperforming with the industry’s growth of 20.3%.

 

Marriott is consistently trying to expand presence worldwide and capitalize on the demand for hotels in international markets. Moving ahead, the company plans to significantly expand its global portfolio of luxury and lifestyle brands. For 2019, Marriott anticipates 5.5% net room growth. The hotel company is also trying to expand footprint outside the United States, especially in Asia, Latin America, Middle East and Africa. Notably, the company’s European pipeline has grown consistently in the recent past and is expected to continue, going forward.

Zacks Rank & Key Picks

Marriott carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Hilton Worldwide Holdings Inc. HLT and Red Lion Hotels Corporation RLH. Hilton currently sports a Zacks Rank #1 (Strong Buy) while Red Lion Hotels carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hilton has reported better-than-expected earnings in the trailing four quarters, recording average of 6.3%.

Red Lion Hotels earnings for the current year are likely to witness growth of 95.6%.

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Expedia Group, Inc. (EXPE) : Free Stock Analysis Report
 
Marriott International (MAR) : Free Stock Analysis Report
 
Red Lion Hotels Corporation (RLH) : Free Stock Analysis Report
 
Hilton Worldwide Holdings Inc. (HLT) : Free Stock Analysis Report
 
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