We have just come out of two weeks of frenetic activity among the investor relations departments of the world's major hotel groups. What useful information do those results hold for business travel buyers?
The news is that hotel groups are making more money from their guests. Our first chart this week shows the growth in global revenue per available room at the four of the biggest business hotel groups.
Hilton's president & CEO, Christopher J. Nassetta, said the Q1 results "exceeded the high end of guidance for adjusted EBITDA and diluted EPS" and that the growth in RevPAR was driven by increases in both ADR and occupancy. Both Hilton and Wyndham expect RevPAR for the year to increase by up to 3%, signalling tough times for buyers.
Hilton is also growing rapidly. It added 85 new hotels in the first quarter, amounting to 12,100 new rooms. Its pipeline, more than half of which is outside its native US, amounts to 371,000 rooms and includes 37 countries and territories where Hilton does not currently have any open hotels.
The system size growth of the four chains are shown above.
Many of the groups have a strong focus on China. IHG says that it added its 400th hotel in Greater China during the quarter. Interestingly, more than 60% of IHG's openings globally were in the Holiday Inn family.
Marriott's Arne Sorensen said the company had opened its 7,000th property during the quarter, the 27-story St. Regis Hong Kong. "Year-over-year gross room openings accelerated to nearly 19,000 rooms, a first quarter record," he said.
Despite all the growth in these chains, revPAR seems sure to climb. It will be a tough year for buyers.