Marriott International reported an “outstanding” third quarter, with CEO Tony Capuano telling analysts that the company’s global RevPAR performance surpassed 2019 levels for the first time since the pandemic began.
Marriott’s global RevPAR was up nearly 2% from 2019, with September marking a “new monthly high-water mark” on the worldwide RevPAR front compared with prepandemic levels. Average daily rate (ADR) levels for the quarter also outpaced 2019 by 10%, which Capuano called “remarkable.”
“Leisure demand remains strong, well above 2019 levels,” said Capuano during the group’s third-quarter earnings call. “Business transient demand also continued to improve during the quarter, although it still lags 2019 levels.”
Despite the fact that third-quarter business transient room nights in the U.S. and Canada remained 11% below 2019’s benchmark, Capuano highlighted opportunities around the increase in bleisure travel.
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“Day-of-the-week trends continue to suggest that travelers are combining leisure and business trips,” said Capuano. “The average length of a transient business trip has increased meaningfully, and year-to-date is up more than 15% compared to 2019.”
No signs of a slowdown
Against a backdrop of rising interest rates and a possible global recession, Capuano told analysts that the company is closely monitoring consumer and macroeconomic trends. Still, he reported that Marriott “has yet to see signs of a slowdown in global lodging demand,” citing positive economic indicators like high employment levels, continued consumer preference toward experiences versus goods and relatively strong levels of household savings.
“In fact, we’ve seen just the opposite,” said Capuano. “Travel spending has been incredibly resilient.”
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He added, however, that “with transient booking windows averaging only about three weeks, trends can change relatively quickly.”
For the quarter that ended Sept. 30, Marriott saw systemwide RevPAR increase 36.3% on the same quarter last year, while systemwide occupancy was up nearly 11 percentage points, to 69.2%. Global ADR grew 15.1% compared with Q3 2021.
Marriott reported third-quarter revenue of $5.3 billion, which marked a 35% increase on the same quarter last year. The company posted a net income of $630 million for the quarter, up from $220 million in Q3 of 2021.
