In the first quarter of 2024, several major hotel companies saw their revenues down — or lower than expected — but their development pipelines were up.
Marriott International posted U.S. and Canada RevPAR growth down 1.5% year over year, while IHG Hotels & Resorts’ Americas RevPAR declined 0.3% year over year, and Wyndham Hotels & Resorts saw U.S. RevPAR decline 5% year over year in the quarter. Similarly, Choice Hotels International’s total revenues were down compared to the same time last year.
Hilton posted year-on-year RevPAR growth of 2% for the first quarter, though CEO Chris Nassetta said the performance was “in the low end of our expected range.”
Wyndham attributed its revenue declines to “industry-wide softness” in Q1, and Hilton, Marriott and Las Vegas hotel operator Caesars Entertainment cited inclement weather as a negative factor.
Despite lagging revenues, several companies grew their development pipelines in the quarter, with hotel conversions, extended stay and luxury projects top of mind for developers.
IHG grew its development pipeline by 6.6% year over year in the quarter, while Choice Hotels expanded its global development pipeline by 10% sequentially to a company record of more than 115,000 rooms.
Hotel conversions were a main driver of pipeline growth for both companies. Conversions generated more than 35% of openings and signings in the quarter for IHG, which continued to expand its newly launched midscale conversion brand Garner. For Choice Hotels, 80% of the total domestic franchise agreements the company awarded in Q1 were for conversion hotels.
Hilton also benefited from hotel conversions, which accounted for 30% of its openings in the quarter — led by its DoubleTree and Spark by Hilton hotels.
And conversions drove portfolio growth for Marriott, which officially launched its strategic loyalty partnership with Las Vegas hotel operator MGM Resorts in the quarter.
Marriott has converted more than 30,000 rooms at MGM properties in Las Vegas under its reservation system, and bookings “exceeded expectations” in the quarter, MGM CEO Bill Hornbuckle said earlier this month.
For other Las Vegas operators Wynn Resorts and Caesars Entertainment, Super Bowl LVIII drove strong performance at properties in the market in February. And the companies are optimistic about group demand driving future revenue growth in Vegas — even if Caesars described Q1 as “butt-kicking.”
Industrywide, extended stay dominated the U.S. hotel construction pipeline in the first quarter of the year, according to Lodging Econometrics. Choice Hotels and Wyndham both expanded in the space in the quarter, and Wyndham entered the upscale extended stay segment through a partnership with WaterWalk just days after Q1’s close.
Wyndham saw heightened developer interest in the latter part of the quarter after Choice Hotels ended its pursuit to acquire its peer in March, Wyndham CEO Geoff Ballotti said during the company’s earnings call.
Below is a roundup of Hotel Dive’s coverage of top hotel companies’ first-quarter 2024 earnings results.
