NEW YORK – Hotel operator Marriott International raised its forecast for annual adjusted profit on May 1 after mixed first-quarter results, banking on international travel demand to offset weakening trends in North America.
As travellers flock to overseas destinations in Asia, the Caribbean and Latin America, Marriott expects the boost in international and group travel to lift its full-year profit.
Global revenue per available room (RevPAR) or room revenue, an important metric in the hospitality industry, rose by more than 4 per cent on the back of 11 per cent growth in international markets.
North American RevPAR rose by 1.5 per cent in the quarter, mostly driven by group and business travel from large corporate businesses.
“Leisure RevPAR was flat in the US and Canada, with more customers going abroad to find warmer weather,” Marriott’s chief finance officer Kathleen Oberg said on an analyst call. A similar pattern held true in China, the company said.
Shares of the Ritz-Carlton owner fell 2 per cent in early trading, after its adjusted quarterly profit of US$2.13 per share missed analysts’ expectations of US$2.17.
The company, based in Maryland in the US, still raised its 2024 adjusted profit forecast to a range of US$9.31 to US$9.65 per share, compared to a previous outlook of US$9.18 to US$9.52 per share.
Incentive management fees were dragged down by declines in North America mainly due to the Maui fires, Marriott said. They rose 4 per cent globally.
“The solid upside and guidance increase are clear positives,” said Jefferies equity analyst David Katz. “Two notable offsets (are) the low level of domestic RevPAR growth and the slight decline in the pipeline.”
Marriott’s room development pipeline decreased to 547,000 rooms at the end of March, from 573,000 in the prior quarter.
Quarterly revenue grew 6 per cent to US$5.98 billion (S$8.13 billion) that surpassed Wall Street estimates of US$5.93 billion, according to London Stock Exchange Group data.
Marriott expects worldwide room revenue to increase by 3 per cent to 5 per cent in 2024. It sees 4 per cent to 5 per cent growth in the second quarter. REUTERS
