Marriott Predicts Revenue Per Room Growth As Travel Demand Stays Strong

By Reuters
Marriott Predicts Revenue Per Room Growth As Travel Demand Stays Strong

Marriott International on Wednesday forecast two-year annualized global revenue per available room (RevPAR) growth of 3% to 6% by 2025, as the hotel operator expects resilient international travel demand.

A recovery in international travel following the easing of pandemic restrictions has been buoyed by a strong dollar, as well as flexible work arrangements that have encouraged more Americans to fly overseas for leisure and business.

Pricier Room Rates

The company in August raised its annual profit outlook as it expected to gain from pricier room rates and sustained demand for travel.

Ahead of the company's analysts meeting later on Wednesday, Marriott said adjusted earnings per share could rise between 25% and 29% in 2023 from a year earlier and expects a two-year annualized growth of 10% to 15% to reach about $11.45 in 2025.

Total gross fee revenue could rise between 16% and 18% in 2023 from a year earlier and reach up to $5.8 billion (€5.5 billion) in 2025 at a two-year annualized growth rate of 6.5% to 9.5%, Marriott said.


Higher Profits

While a recession risks long-term travel spending, unabated travel demand has encouraged hotel operators to implement price hikes in the past year, enabling companies such as Marriott and Hilton to post higher profits.

Marriott, which owns hotels like Sheraton, Westin and St. Regis, has seen a steady uptick in bookings, even as experts have raised concerns over a potential economic slowdown that could dent consumer spending.

'Booking Trends Solid'

Second-quarter net income rose 7% to $726 million (€661 million), beating estimate of $654.6 million (€596 million).

"While conditions could change rapidly, booking trends remain solid. We are raising our full-year rooms growth and earnings guidance," said CEO Anthony Capuano, speaking in August.

Article by Reuters, additional reporting by Hospitality Ireland.