First-quarter
business transient travel revenue at Marriott International properties from the
company’s 100 largest corporate accounts increased at the sharpest quarter-over-quarter
level in two years, executives said Wednesday during Marriott’s earnings call,
spurring an overall year-over year revenue per available room increase.
Systemwide
first-quarter business transient RevPAR increased 1 percent year over year,
said Marriott president and CEO Anthony Capuano, and the segment made up 34
percent of the company’s Q1 room nights. The March 31 timing of the Easter
holiday dented year-over-year business travel revenue comparisons, he said, and
CFO Leeny Oberg said the company projects “continued improvement in
business transient revenues” throughout 2024.
Large
companies in aggregate since the pandemic have been far slower to recover their
business travel volume than their small and midsized brethren, but several
suppliers have noted increased first-quarter demand, including Hilton Worldwide, Alaska Airlines and Southwest Airlines, even as quarterly results were mixed
for some.
For
Marriott’s largest clients, “we absolutely continue to see recovery of
that business,” Oberg said. “For example, the finance segment is now
8 percent up relative to 2019. You saw really strong continued momentum in
manufacturing and communications.”
Revenue from
the accounting, consulting and technology sectors remains “down
meaningfully” from 2019 levels, she said, but “they also continue to
see meaningful momentum into Q1.”
Conversely,
Oberg suggested some softening of demand in the SME segment, noting that in the
first quarter “you did see, relatively speaking, a slightly lower
percentage of small and medium-sized BT business across the portfolio showing
up in the lower end.”
Group demand remained strong, Capuano said, with first-quarter
systemwide RevPAR for the segment up 6 percent year over year, with full-year
group revenue pacing at a 9 percent increase. Oberg called the segment
“the home-run hitter” in Marriott’s projections.
Q1
Performance, 2024 Outlook
Marriott’s
first-quarter systemwide RevPAR increased 4.2 percent year over year to
$118.13, and RevPAR in the U.S. and Canada increased 1.5 percent to $119.61.
Global
occupancy increased 0.9 percentage points year over year to 65.6 percent, while
occupancy in the in the U.S. and Canada declined 0.3 percentage points to 65.5
percent.
First-quarter
systemwide average daily rate increased 2.8 percent year over year to $179.99,
while ADR in the in the U.S. and Canada increased 1.9 percent to $182.63.
Total first-quarter revenue increased
6 percent year over year to nearly $6 billion, and net income decreased 25
percent to $564 million.
Marriott
projected a second-quarter global RevPAR increase of 4 percent to 5 percent
year over year and a full-year increase of 3 percent to 5 percent.
