Hotel giant Marriott International has negotiated “high single-digit” increases in corporate room rates for 2023 as business travel’s recovery gained more momentum during the final months of 2022.
The US-based firm said that business travel demand had reached “nearly” 90 per cent of pre-Covid levels in the final quarter of last year, with average daily rate (ADR) up by 3 per cent on the same period in 2019.
Marriott CEO Anthony Capuano said: “Our successful negotiation of high single-digit special corporate rate increases for 2023 bodes well for continued price strength.”
Despite the rebound of business travel, it has still lagged the recovery of leisure and group travel, with revenue from the latter being 10 per cent above pre-pandemic levels in Q4 of 2022 for Marriott.
“Our performance in 2022 was terrific,” enthused Capuano. “Just two years after experiencing the sharpest downturn in our company's history, we reported record financial results.”
For the fourth quarter, Marriott’s global revpar (revenue per available room) increased by 5 per cent compared to 2019, driven by a 13 per cent increase in ADR over the same period.
“With the exception of Greater China, revpar in all regions more than fully recovered and continued to show meaningful advances in occupancy and ADR,” added Capuano.
Outside of the US, the company’s international business saw revpar increase by 3 per cent in the fourth quarter of 2022 compared with 2019’s figures.
Capuano said that Marriott was “well-positioned for strong growth” in the next few years due to continued strong demand for travel.
“As we look ahead, while concerns about the macroeconomic environment persist around the world, booking trends to date remain robust and we have significant momentum in our business,” he said.
Marriott’s worldwide revpar in January was up by 51.6 per cent year-on-year, although demand in January 2022 was “depressed” by the emergence of the Omicron variant of Covid.
During 2022, Marriott increased revenue by 50 per cent year-on-year to reach $20.8 billion, compared with $13.9 billion in 2021. This helped the company to achieve a net profit of $2.36 billion in 2022 – more than double the $1.1 billion profit recorded in 2021.
The company’s regional figures show that Marriott’s properties in Europe achieved an ADR of $198.67 in 2022, which was a 25.9 per cent increase on 2021 on a “constant currency basis”, with room occupancy rising by nearly 30 percentage points year-on-year to reach 61.1 per cent in 2022.
A comparison with the pre-Covid year of 2019 shows that comparable ADR in Europe was 11.3 per cent higher in 2022, despite room occupancy remaining 11.1 percentage points lower than achieved in 2019.
Marriott’s global portfolio consisted of nearly 8,300 properties and 1.5 million rooms at the end of 2022, with a development “pipeline” of just over 3,000 hotels and 496,000 rooms.