Renaissance
ITEM 19
EARNINGS CLAIMS
1.
Average Occupancy Rate, Average Daily Room Rate, and Average RevPAR
As of December 31, 2004, there were 69 domestic managed and franchised (U.S. and
Canada) open and operating Renaissance hotels; of these, 29 were franchised. There were 25
domestic franchised hotels (with available Smith Travel Research, Inc. (Smith Travel) data) open
and operating for more than two full years, and for the one-year period ending December 31,
2004, those hotels had an average occupancy rate of 69.8%, an average daily room rate of
$113.89, and an average revenue per available room (RevPAR) of $79.54. The occupancy rate
for the 25 franchised hotels ranged from a high of 80.1% to a low of 52.3%. Thirteen of these
hotels (52%) achieved an occupancy rate equal to or greater than 69.8%. The average daily room
rate ranged from a high of $113.89 to a low of $82.05. Ten of these hotels (40%) achieved an
ADR equal to or greater than $113.89. The RevPAR ranged from a high of $111.84 to a low of
$53.51. Twelve of these franchised hotels (48%) achieved or exceeded the average RevPAR of
$79.54.
The “average occupancy rate” is the total occupied rooms reported divided by total
available rooms for the entire period. The “average daily room rate” is the gross room sales
divided by total occupied rooms. The “average RevPAR” is the gross room sales divided by total
available rooms.
2.
Yield Index
The 25 domestic franchised Renaissance hotels that had been opened for two years or
more achieved an average yield index of 100.2% for the one-year period ending December 31,
2004. The yield index ranged from a high of 189.6 to a low of 70.5% for the hotels during that
period. Sixteen domestic franchised hotels (64%) achieved a yield index greater or equal to
100.2%.
Yield index measures the fair share of the amount of available revenue a hotel (or hotel
brand) receives relative to its competitive set (as defined by each hotel or brand) within a given
market.
Smith Travel, an independent research firm servicing the travel industry, compiles
occupancy, rate, RevPAR, yield index and other relevant information, concerning the lodging
industry and is used by substantially all of the major lodging companies for tracking this data. We
are relying on the data compiled and reported by Smith Travel in providing this information, and
such information has not been audited or otherwise confirmed by us.
3.
Reservations
During 2004, Marriott’s Worldwide Reservations Centers received 1,238,954 inquiries,
which resulted in 1,393,070 gross room nights for Renaissance hotels. In addition, 2,805,833
gross room nights were generated through the Marriott reservation system electronic connection
to the global distribution system utilized by airlines and travel agents, Marriott.com, and
TravelWeb. The average for all the 25 franchised Renaissance domestic hotels, that had been
open for more than two years, was 40,029 gross room nights per hotel. Gross room nights per
hotel ranged from 13,820 for a small Renaissance hotel of fewer than 300 rooms to 98,772 for a
hotel of more than 1000 rooms. Ten franchised Renaissance hotels (40.0%) had more than
40,029 gross room nights. As a percentage of gross room nights per hotel, the average percentage
generated by the Marriott reservation system for the 25 franchised Renaissance hotels in 2004
was 38.8%. This average ranged from 22.0% to 53.8%. Fourteen franchised Renaissance hotels
(56.0%) had more than 38.8% of their gross room nights generated by the Marriott reservation
system.
4.
Marriott Rewards
Marriott Rewards has 21 million members worldwide, and over 2,500 hotels and resorts
in 63 countries participate in Marriott Rewards. Marriott’s Consumer Marketing Department
tracked the 25 domestic franchised Renaissance hotels that had been open and operating for at
least two years. For those hotels, for the one-year period ending December 31, 2004,
Renaissance hotel guests who were members of Marriott Rewards generated Marriott Rewards
eligible revenue that is approximately 45% of the total room night revenue with an average spend
of $143. The total of all Marriott Rewards room nights for the 25 domestic franchised
Renaissance hotels was 723,000, generating approximately $103,667,000 in gross sales, not
including banquet and catering sales, taxes and tips. For the 25 hotels tracked, Marriott Rewards
members paid for an average of 28,900 room nights. These Marriott Reward hotel room nights
ranged from 8,900 to 71,500 and 11 domestic franchised hotels (44%) achieved or exceeded the
average of 28,900 paid Marriott Rewards room nights.
5.
Disclaimer
The figures above represent averages, and we do not claim or expect that you can or will
expect to achieve the same average occupancy percentages, room rates, RevPAR, reservations,
Marriott Rewards room nights or yield index. Occupancy rates, average daily room rates,
RevPAR, reservations, Marriott Rewards, room nights and yield index will vary from hotel to
hotel and will depend upon many variables and factors, including size, location, seasonality,
competition, general economic conditions, the length of time your hotel has been open or
affiliated with Marriott, the condition of the hotel, the quality of service of service at the hotel,
and the efficiency with which you operate your hotel. The average occupancy rates, average
daily room rates, RevPAR and yield index shown above were based on hotels with two years of
operating results. Hotels typically achieve lower results in their first year of operation. We
caution you that these statements relate to historical performance and are not guarantees of future
performance. Operating results are subject to numerous risks and uncertainties, including the
duration and severity of economic conditions, public reaction to terrorist attacks, supply and
demand changes for hotel rooms; competitive conditions in the lodging; relationships with
customers and property owners; and the availability of capital.
YOU SHOULD UNDERSTAND THAT YOUR RESULTS ARE LIKELY TO
DIFFER SUBSTANTIALLY FROM THE AVERAGE DAILY RATE, AVERAGE
OCCUPANCY RATE, REVPAR, MARRIOTT REWARDS ROOM NIGHTS, YIELD
INDEX AND RESERVATION PRODUCTIVITY INDICATED ABOVE.
We will provide you with substantiation of the data used in preparing this Item 19 upon
your request. The average occupancy rates, average daily room rates and RevPAR presented in
these system averages for franchisees are based on information we received from independent
franchisees, and such information has not been audited or otherwise verified by us. We are under
no obligation to disclose specific information for a particular hotel in the system.