Marriott beats estimates as guests book longer stays

A Marriott flag hangs at the entrance to the New York Marriott Downtown hotel in Manhattan, New York November 16, 2015. REUTERS/Andrew Kelly

NEW YORK, Aug 2 (Reuters) – Marriott International Inc (MAR.O) beat Wall Street estimates for quarterly revenue and profit on Tuesday, helped by higher occupancy levels and more expensive fares as travelers booking more group travel and longer hotel stays.

Travelers largely free of COVID-19 restrictions are spending big on hotels, airfares and car rentals. This trend has so far shown no signs of slowing down, although some are concerned about high inflation and the potential for an economic downturn.

“The shift in spending towards experiences rather than goods, high employment levels and the lifting of travel restrictions and the opening of borders in most markets around the world are fueling travel,” said the chief executive of Marriott, Anthony Capuano, to investors on a call.

Average length of stay is up 25% from 2019, as is the average size of new bookings, according to Marriott Chief Financial Officer Kathleen Oberg.

The company is seeing an improvement in international, city and luxury travel bookings, but occupancy levels in these segments still lag behind resort destinations.

“Maintaining the dollar/euro peg that can entice Americans to go abroad while deterring international travelers from coming to the United States,” said CoStar Group’s country director of hotel analytics Jan Freitag. , adding that this could lead to some weakness in demand for high-end leisure in the United States. but could be a boom for cities like Venice or Berlin.

The company said overnight stays by international customers more than doubled in Europe from the first to the second quarter.

Marriott said corporate room bookings in June were 9% lower than the same month in 2019, compared with a drop of about 20% in the first quarter.

“Downtown office occupancy continues to lag and this ultimately puts a governor on the growth that city hotels can expect since travelers can simply substitute a Teams or Zoom call for the place,” said Jan Freitag, national director of hotel analytics for the CoStar Group.

Marriott said booking trends suggest travelers are combining leisure and business travel.

Revenue per available room (RevPAR) increased 70.6% globally, 66.1% in the United States and Canada, and 87.8% in international markets compared to the same period a year ago early.

Marriott, which operates the Sheraton and Ritz-Carlton hotel chains, reported adjusted earnings of $1.80 per share, well above the Wall Street consensus of $1.56 per share, according to Refinitiv data.

Revenue grew 70% year-on-year to $5.34 billion. Analysts had expected $4.92 billion, according to Refinitiv data.

Looking ahead, the company expects third-quarter earnings per share, excluding items, of $1.59 to $1.69 per share. That compares to analyst estimates for $1.58 per share.

Shares of the company rose about 1% in midday trading.

Reporting by Doyinsola Oladipo; Editing by David Goodman, Mark Potter and Mike Harrison

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