Marriott Reports Stable Q1 Corporate Travel Demand with Rising Rates

Marriott International’s first-quarter business transient volume recored a “modest” increase, while the company’s revenue per available room gained and demand increased, particularly in Greater China, company executives said Tuesday during a quarterly earnings call.

“First-quarter U.S. and Canada business transient revenues surpassed 2019 levels for the first time since the pandemic began,” Marriott president and CEO Anthony Capuano said on the call.

While demand across all markets was strong, “international markets were particularly robust,” Capuano said in a statement. The company attributed revenue growth and increased demand to travel restrictions lifting throughout Asia-Pacific, particularly in Greater China, which “significantly boosted first-quarter demand in the region,” he said.

In Q1, Marriott reported systemwide RevPAR at $116.45, up 34 percent over 2022. International RevPAR reached $108.80 in Q1, up 63 percent year over year.

Marriott’s systemwide occupancy in Q1 reached 65.3 percent, up 11 percentage points year over year. Internationally, occupancy increased 18.3 percentage points year over year to 63.9 percent—the bulk of which was “overwhelmingly” driven by domestic travel within the Asia-Pacific market, Marriott CFO and executive VP of business operations Leeny Oberg said.

In Q1, Marriott’s systemwide ADR increased 11 percent year over year to $178.31, and international ADR increased 16 percent to $170.39.

He attributed the steady recovery to increased rate bumps and “higher special corporate negotiated rates and 15 percent growth in group ADR,” Capuano said. According to company executives, group rates for 2023 are pacing up 26 percent year over year.

Additional Q1 Updates

Following the company’s recent fine for resort fee settlement noncompliance, Marriott later this month will begin bundling resort fees into pricing displays for greater visibility. “We are already showing it,” Capuano said, but following “discussions with various districts,” the company is “making sure the transparency of those disclosures is crystal-clear and transparent.”

Marriott reported Q1 revenue of $5.62 billion, up 34 percent year over year. The company also reported net income of $757 million, versus $377 million in 2022.

City Express Acquisition Finalized

Marriott has completed the acquisition of the City Express brand portfolio from Hoteles City Express, the company announced Monday. The acquisition, first announced in October, officially marks Marriott’s entrance into the affordable midscale segment and makes 31 brands for the company.

Angelique Platas www.businesstravelnews.com