After a fourth quarter in which business transient revenue per available room increased 3 per cent globally year over year, Marriott International executives projected 2025 RevPAR for the segment would grow in the "low single digits," they said on Tuesday during an earnings call.
After calling full-year 2024 business transient performance "very strong" for the hotel company, CFO Leeny Oberg projected such business in 2025 to be "sturdy" and with a higher growth rate than leisure travel, driven more by gains in average daily rate than occupancy.
Meanwhile, Oberg suggested Marriott's business transient volume has returned to pre-pandemic levels. "Business transient has recovered to 2019 levels, just in a little bit different form," she said, noting the quicker recovery of small and midsize companies than "the largest corporates”.
For larger clients, "you still see their nights being behind 2019 levels, although I will say that some other of those large corporates, like in the financing sector of the economy, they are actually back to more than recovered, so overall the business has recovered.”
Oberg noted that overall room night volume on traditional business travel days of Monday through Wednesday remain below pre-pandemic levels, though it's balanced by higher levels on other days.
Business transient stays in the fourth quarter represented 33 per cent of Marriott's global room nights, Marriott president and CEO Anthony Capuano said.
Marriott Q4, full-year 2024 metrics
Marriott's systemwide fourth-quarter RevPAR increased 5 per cent year over year to $126.26, while average daily rate increased 3.2 per cent to $185.42 and occupancy increased 1.2 percentage points to 68.1 per cent.
In Europe, fourth-quarter RevPAR increased 7.2 per cent year over year to $145.51, while ADR increased 2.9 per cent to $207.8 and occupancy increased 2.8 percentage points to 70 per cent.
For full-year 2024, systemwide RevPAR increased 4.3 per cent year over year to $128.23, while ADR grew 2.8 per cent to $183.58 and occupancy increased 1 percentage point to 69.8 per cent.
In Europe, 2024 RevPAR grew 7.6 per cent to $154.31 – the highest of any region – while ADR increased 3.5 per cent to $219.39 and occupancy grew 2.7 percentage points to 70.3 per cent.
Marriott projected global first-quarter RevPAR to increase 3 per cent to 4 per cent year over year; Oberg noted January RevPAR increased 6 per cent. For the full year, Marriott projected RevPAR growth of between 2 and 4 per cent.
Total fourth-quarter revenue increased about 5 per cent year over year to more than $6.4 billion, while net income was $455 million compared with $848 million one year prior.
Marriott at year end had 9,361 properties in its global portfolio, totalling more than 1.7 million rooms. It projected global 2025 net rooms growth of between 4 and 5 per cent year over year.