Travel giants Marriott International and Avis Budget Group have seen an improvement in corporate business but this recovery remains significantly behind the pick-up in the global leisure travel sector.
Both companies have announced their financial results for 2021, which showed improved trading in the final quarter of the year, despite the impact of the spread of the Omicron variant of Covid-19.
Hotel firm Marriott International said there had been “slower, yet continued improvement” for business and group travel in the final quarter of 2021, while leisure demand “continued to shine”.
Marriott’s global average daily rate (ADR) “nearly” recovered to pre-pandemic levels in the fourth quarter to $157.62, which was just 2.3 per cent lower than the 2019 average. Although, occupancy was only 58 per cent across all of the group’s properties, down by 12 points compared with 2019.
European ADR was even closer to 2019 levels after rising to $173.23, which was only down by 1.2 per cent on two years ago. But occupancy rates in Europe remained lower than other regions of the world at 46.6 per cent – still down by more than 23 percentage points on 2019 levels.
Marriott CEO Anthony Capuano said he expected to “continue to see improvement” in corporate business, as well as “more short-term” bookings. He noted a 25,000-room night Salesforce meeting, held at 11 Marriott properties last week in New York, had been booked just one month before the event.
“Cancellations have slowed more recently. New group bookings have also been gaining momentum," he said.
Marriott’s revenue per available room (revpar) increased across the board: by 124.5 per cent worldwide compared with the fourth quarter of 2020, including an 83.3 per cent rise across its international markets.
The company reported net profit of $468 million in the final quarter of 2021, compared to a net loss of $164 million in the final quarter of 2020. For the full year, Marriott made a net profit of $1.1 billion in 2021, compared with a loss of $267 million in 2020.
Car rental firm Avis Budget Group said it had recorded its “best ever” third and fourth quarters in 2021, despite a “dearth” of corporate travel throughout January and early February.
CEO Joe Ferraro said corporate business in January had been affected by “many companies reintroducing work-from-home policies for the start of this year”.
More positively, Avis Budget chief financial officer Brian Choi added that it had seen more corporate business in the fourth quarter than in the previous three quarters of 2021, including increased demand from small and midsized businesses.
Ferraro also suggested corporate business in 2022 would start to return more rapidly than it did in the early months of 2021.
"There is probably going to be some pent-up demand as people get back to the office and they want to get together, and they start looking at the revenue and top-line earnings to see if there's a need to go on more sales calls," he said.
Avis Budget’s fourth-quarter revenue was up 90 per cent year-on-year to $2.6 billion, which also represented a 19 per cent gain from the same period in 2019. Net profit for the quarter was $381 million compared with $142 million in 2019.
The group’s full-year revenue in 2021 increased by 72 per cent from 2020, and by two per cent from 2019, to $9.3 billion. 2021’s net profit was $1.3 billion, compared with $302 million in 2019.