Marriott International is confident in its continued growth, despite some challenges on the horizon. The company forecasts strong global performance for the year, with a focus on revenue per available room (RevPAR) growth of 3-4%. Executives noted a softening in China, caution from travelers in spending, and weaker bookings around the U.S. presidential election as concerns to monitor.
China, Marriott’s second-largest market outside the U.S., has been experiencing weak RevPAR results due to factors such as “revenge travel” fatigue and economic challenges. The company is uncertain about the duration of this weakness, as China’s booking window is shorter than the rest of the world. The U.S. election is also expected to impact travel patterns, leading to lower RevPAR in the U.S. and Canada due to less group business around the time of the election.
Marriott highlighted a wealth gap in demand, with premium and luxury segments showing stronger performance compared to lower-tier accommodations. Leisure travelers are spending more, particularly in higher-end hotels and resorts, while ancillary spending was softer than anticipated. However, leisure transient RevPAR saw a 2% increase, showcasing growth in the segment over the past five years.
Despite challenges in China and from the U.S. election, Marriott saw strong regional performance in markets like Japan, Europe, and the U.S. and Canada. Worldwide RevPAR was up 4.9%, with net room growth at 6% year-over-year. The company’s group business showed particular strength, with a 10% increase in RevPAR year-over-year. Marriott’s loyalty program, Marriott Bonvoy, continued to grow with over 210 million members, driving customer retention and repeat stays.
Marriott’s development pipeline remains robust, with over 3,500 properties and more than 559,000 rooms in progress globally. The company is seeing strong interest in hotel development deals in China despite weak demand, with faster construction timelines than in North America. Luxury hotel expansion is a focus, with conversion deals and new brand developments driving growth.
Overall, Marriott’s strong performance in most markets, expansion of its loyalty program, and robust development pipeline position the company well for future growth. While challenges exist in certain regions and from external factors, Marriott remains optimistic about its long-term prospects and is focused on leveraging its strengths to navigate the current landscape of the accommodations sector.
