Betting on a sharp rebound in international travel following the pandemic, Marriott International posted strong second quarter (Q2) earnings on Tuesday (Aug. 1), beating analysts’ expectations on both the top and bottom line.
According to the U.S. hospitality giant, Q2 worldwide RevPAR (revenue per available room) — a key metric for the hotel industry — jumped 13.5% versus the 2022 quarter, up 6% in the U.S. and Canada, and 39% in international markets. This led to a reported net income of $726 million, compared to the $678 million in the 2022 quarter. Worldwide occupancy in the quarter also reached 72%, while global average daily rate (ADR) grew 6% year over year.
The company attributed the strong results to continued recovery in global lodging demand, fueled by increasing demand for both leisure and business travel, particularly from key markets like China.
“With continued momentum in demand for global travel, we posted another quarter of outstanding results. Greater China rebounded quickly once travel restrictions were lifted in January, with second quarter RevPAR surpassing pre-pandemic levels,” Anthony Capuano, Marriot’s president and CEO, said in the press release.
As business travel demand began to recover, Marriott announced a major global transformation and launch of new reservations, loyalty and property management platforms, as well as an exclusive long-term strategic license agreement with MGM Resorts International in July for sports, music, culinary and entertainment experiences. In June, the hotel operator also announced plans for new affordable midscale extended stay offering in the U.S. and Canada.
The company is also “increasingly leveraging technology to enhance the guest experience, to drive profitability for our owners and to simplify processes for our associates,” Leeny Oberg, Marriott’s CFO and executive vice president of development, said on a call with analysts.
The growth strategies appear to be paying off, as revenue from groups increased 10% year over year in the U.S. and Canada. Meanwhile, cross-border travel demand is on an upward trend, with global credit card acquisitions up 25% and global card spend up 10% versus Q2 2022.
“While conditions could change rapidly, booking trends remain solid. We are raising our full year rooms growth and earnings guidance and now expect to return $4.1 billion to $4.5 billion to shareholders in 2023,” the company stated in the report, representing nearly double the $2.6 billion it returned to shareholders year to date through July 28.
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