Dive Brief:
- Marriott International posted 4.2% year-on-year global RevPAR growth in the first quarter of 2024, with U.S. and Canada RevPAR growth lagging at 1.5%, according to an earnings report released Wednesday.
- Group RevPAR in the U.S. and Canada region, however, was strong, rising nearly 5% year over year with growth in both rate and occupancy.
- In a release, CEO Anthony Capuano said slower U.S. RevPAR growth reflects normalizing demand in the region post-COVID. In an earnings call with analysts, CFO Leeny Oberg said that growth was led by its strong group and large corporate business, which the company expects to increase in coming years.
Dive Insight:
On the earnings call, Capuano said 2024 is “off to a solid start.”
ADR grew around 3% in the quarter — with occupancy hitting nearly 66%, up approximately 100 basis points year over year — and Q1 Adjusted EBITDA rose to $1.14 billion from $1.09 billion in the same quarter last year.
Leisure RevPAR in the U.S. and Canada region was flat in the quarter, “with more customers going abroad to find warmer weather,” Oberg said. Hilton and Caesars Entertainment have also said inclement weather was a factor in their quarterly results.
“Group is going to be the home-run hitter again for the full year,” Oberg said, noting that Marriott’s top 100 accounts saw the most sequential improvement in eight quarters in Q1.
Meanwhile, Marriott Bonvoy’s partnership with MGM Resorts International began taking bookings last month, adding 16 hotels and resorts to the loyalty program’s system. While it’s too early to know exact results from the partnership, Capuano said expectations for the program’s success “have been exceeded in the early days.”
On the development end, Marriott grew its global pipeline to nearly 547,000 rooms, up 9% from one year ago. While the company still hasn’t announced details for the new midscale brand Capuano teased on its previous earnings call in February, the CEO shared on Wednesday that it will be global and conversion-friendly. The push into midscale follows Marriott’s first foray into the chain scale in the U.S. with the launch of StudioRes last year.
In the meantime, Capuano pointed to the company’s luxury portfolio as “an area where we continue to lengthen our lead.” As of September, the company had a 16.9% global market share of luxury hotels, leading over Hyatt (11.4%), Accor (10%) and IHG (8.8%).
