Dive Brief:

• Marriott International reported its third-quarter 2023 earnings Thursday morning, posting 8.8% growth in global RevPAR year over year, with 4.3% gains in the U.S. and Canada. The company also saw a nearly $160 million increase in adjusted EBITDA from this time last year, bringing its adjusted EBITDA to $1.14 billion. 
• Marriott also posted development growth in the third quarter, during which the company added 17,200 rooms globally, including more than 4,900 conversion rooms. Marriott’s global development pipeline reached a record high of 3,239 properties, or nearly 557,000 rooms, at the end of the quarter. 
• Marriott President and CEO Anthony Capuano attributed the strong results to “robust demand around the world.” Marriott raised its full-year RevPAR growth guidance and expects to further expand its development pipeline. 

Dive Insight:

In the Thursday earnings report, Capuano announced that in light of Marriott’s third-quarter earnings, the company had raised its full-year RevPAR growth guidance to between 14% and 15% year over year and expects to return between $4.3 billion and $4.5 billion to shareholders. 

In the U.S. and Canada particularly, leisure transient demand remained solid in the third quarter, Capuano said, driving RevPAR growth. Many urban markets showed outsized growth, he added, with group and business transient demand seeing mid-single-digit hotel revenue gains in the quarter.

Globally, both occupancy and rate contributed to RevPAR gains in the third quarter, Capuano said, as did the continued rise of cross-border travel. 

In late September, the company announced in a meeting with investors and analysts that because of continued robust demand for international travel and demand for hotels particularly, it plans to expand its global portfolio by between 230,000 and 270,000 net rooms from year-end 2022 through 2025. 

In Q3 2023 alone, Marriott added 17,192 rooms to its global portfolio, bringing its total global lodging system to 8,700 properties, or approximately 1,581,000 rooms.

The company’s worldwide development pipeline reached a record high in Q3, Capuano shared in a Thursday earnings call with analysts, noting that strong interest in conversion continues. Conversions represented 20% of signings and nearly 30% of openings in the quarter, he said. 

Across the board, Marriott remains bullish on the midscale segment. According to Capuano, the company’s StudioRes extended stay brand, which launched earlier this year, has seen “terrific” interest. Marriott is in talks for StudioRes deals in more than 300 U.S. markets, he shared in the call. 

“Our strategy is to continue to strengthen our leadership position in luxury and upper upscale, while expanding our growth potential in a new segment for us, which is midscale,” Capuano said.