BETHESDA, Maryland: Marriott International surpassed its quarterly revenue and profit estimates, driven by better than expected occupancy levels and higher rates amidst more group travel bookings and longer hotel stays.
After the end of most COVID-19-related restrictions, travelers are spending more on hotels, airplane tickets and car rentals, a trend that has shown no signs of slowing, despite surging inflation and a potential recession.
In a call with investors, Marriott Chief Executive Officer Anthony Capuano said, "The shift of spending towards experiences versus goods, sustained high levels of employment and the lifting of travel restrictions and opening borders in most markets around the world are fueling travel."
Marriott's Chief Financial Officer Kathleen Oberg also noted that the average length of stay is up 25 percent, compared with 2019.
While international travel, urban and luxury bookings are witnessing an upturn, occupancy levels in those segments still trail bookings for resorts.
"The continued dollar/euro parity which may entice Americans to go abroad will deter international travelers to come to the U.S.," noted Jan Freitag, CoStar group national director of hospitality analytics, as quoted by Reuters.
According to Marriott, corporate room bookings in June were 9 percent below the same month in 2019, compared with about 20 percent down during the first quarter.
"Downtown office occupancies continue to lag and that ultimately puts a governor on the growth that urban hotels can expect, since travelers can just substitute a Teams or Zoom call instead," Freitag added.
Marriott, which operates the Sheraton and Ritz-Carlton hotel chains, said booking trends suggest travelers are combining leisure and business trips.
It also reported adjusted earnings of $1.80 per share, higher than the Wall Street forecast of $1.56 a share, while its revenue rose 70 percent year-on-year to $5.34 billion, above analysts' expectations of $4.92 billion, according to Refinitiv data.