Systemwide second-quarter business travel revenue per available room at Marriott properties increased 4 per cent year on year, a trend executives project will continue throughout 2024, they said on Wednesday (31 July) during the company's quarterly earnings call.
Total business transient room nights and average daily rate in the quarter also increased, Marriott president and CEO Anthony Capuano said. The sector comprised 33 per cent of the company's second-quarter room nights, he said.
Small and midsized enterprises in the second quarter accounted for "nearly 55 per cent" of business transient room nights, Capuano said, noting the segment "has grown significantly over the last few years." SMEs represented about 60 per cent of business transient room nights in the second quarter of 2023, officials said last year.
Still, Marriott cut its projected full-year 2024 RevPAR (revenue per available room) to between 3 and 4 per cent above 2023 levels, down from its prior forecast of between 4 and 5 per cent growth. The company said the change was mostly due to softening domestic demand in China and North America. Meanwhile, its European rival Accor last week raised its annual RevPAR target following similar Q2 revenue growth.
"Worldwide RevPAR growth is still anticipated to be driven by another year of strong growth in group revenue, continued improvement in business transient revenues, and slower but still growing leisure revenues," Marriott CFO Leeny Oberg said on the call.
Group revenue per available room in the second quarter increased 9 per cent year over year, Capuano said, including a 4 per cent increase in average daily rate and a 5 per cent increase in occupancy. Oberg added that the company expects a slowdown in group business in November due to the US presidential election.
Business Access by Marriott Bonvoy, the company's travel management option for SMEs, which was announced in July, "is already seeing great interest," Capuano said. "We're extremely pleased with the initial account signups and users of the platform, both of which have outpaced expectations."
Marriott Q2 metrics
Marriott's second-quarter systemwide RevPAR increased 4.9 per cent to $135.52. RevPAR in the US and Canada increased 2.8 per cent to $130.96, while in Europe RevPAR saw a 6.6 per cent increase to $171.89.
Global occupancy increased 1.6 percentage points to 73.1 per cent, while occupancy in Europe increased 2.1 percentage points to 75 per cent.
Second-quarter systemwide ADR (average daily rate) increased 2.4 per cent year on year to $211.16. ADR in Europe increased 3.6 per cent year on year to $229.13, while the US and Canada saw ADR increase 2.2 per cent to $186.70.
Total second-quarter revenue increased 6 per cent year over year to more than $6.4 billion. Net income also increased 6 per cent to $772 million.
As with its full-year projection, Marriott forecast third-quarter RevPAR to increase between 3 and 4 per cent year on year.