Marriott soars to full US recovery thanks to higher room rates
If Marriott International, with its wide array of brands from Fairfield Inn & Suites to W and St. Regis, is the bellwether for the hotel industry, it’s a good time to be in hospitality — especially if you run a hotel in the U.S. and Canada.
Marriott on Wednesday reported a $377 million profit for the first three months of the year, up from the $11 million loss the company reported for the same time last year. Overall hotel performance for Marriott brands around the world was just under 20% off 2019 levels while those in the U.S. and Canada were down by 14.5%.
While there is still plenty of volatility in the global travel environment — China, where Marriott last year momentarily saw a full performance recovery, is once again struggling amid lockdowns during an omicron case surge — Marriott leaders are optimistic about sustaining its recovery momentum.
“Many countries have started to cautiously adopt a live-with-COVID policy, leading to a rise in demand for all types of travel,” Capuano said on the Wednesday investor call.
Canada and the U.S., where a bulk of Marriott’s hotels are parked, might have a strong recovery underway. But the numbers are even better for hotels in the Middle East and Africa, where hotel performance was up 12% from 2019 levels.
Hilton leaders gave a similarly optimistic outlook on the travel recovery during their own earnings call earlier in the week; though, some investor analyst reports following that call appeared to chide the company for taking too conservative an outlook given how much travel demand is expected during the summer.
Marriott’s estimation that U.S. and Canadian hotels would remain in line with 2019 levels through the end of the year drew similar questions about if company leaders were playing it safe with their forecast.
Even though analysts and industry executives anticipate record-setting demand levels this summer at hotels, Marriott doesn’t have as clear an outlook for the fall and winter when it comes to business and group booking demand. Both sectors made significant recovery gains to date this year, but booking windows remain shorter than usual.
“It’s that murkiness of visibility in the back half of the year that’s causing us not to be more bullish in terms of forecasting,” Capuano said.