It was no surprise that Marriott international boss Arne Sorenson wasn’t exactly bullish on the future of Airbnb during a discussion at the University of Miami Real Estate Impact Conference.
The home sharing company has become a global presence in a hospitality industry that Marriott has long been a top player. Sorenson, CEO of Marriott International, said the Airbnb experience “will get a little less unique,” but did acknowledge the loyalty among Airbnb’s hosts.
“They are competitors of ours. They’re still new,” Sorenson said in Friday’s keynote discussion with real estate developer Steve Witkoff. “I don’t know anyone knows as competitors where they’ll be a decade from now.” Airbnb, now a decade old, was estimated turn a $3.5 billion annual profit by 2020, according to Fortune.
Since its $13 billion merger with Starwood Hotels & Resorts in 2016, Marriott’s portfolio has grown to 1.25 million hotel rooms worldwide. The Maryland-based multinational company was founded in 1927.
But Sorenson said there is still room for growth, and pointed to China as an example.
The U.S. is Marriott’s biggest markets, but China is growing faster, Sorenson told Witkoff, founded of the New York-based global real estate firm Witkoff Group. Marriott has 300 mostly luxury hotels and another 300 under construction there.
“The government is trying to shift their economy toward consumption,” Sorenson said.
Sorenson also touched on the rise in hotel branded-condo developments, which he said “brings the value up for both.” But those projects can be risky if the hotel component is too small, he added, and the business is reliant on the residential succeeding. Sorenson said is also seeing more modular construction on the lower end of the market, a process that can speed up construction from 12 months to one to three months. Marriott is part of that uptick, according to a report in USA Today, which noted the hotel chain was expected to sign 50 hotel deals for prefabricated guest rooms.