Dive Brief:
- Marriott’s global RevPAR increased by 13.5% in the second quarter of 2023 compared to the same period in 2022, according to the company’s second quarter earnings report. RevPAR was up 6% in the U.S. and Canada year over year and up 39.1% in international markets.
- Marriott reported adjusted net income of $690 million in Q2 2023, compared to adjusted net income of $593 million one year ago. Additionally, the company’s adjusted EBITDA totaled $1.2 billion in the second quarter of this year, up from the $1.02 billion reported at the same time last year.
- Due to strong earnings results in Q2 — driven by continued momentum in global travel, according to Marriott President and CEO Anthony Capuano — the company has raised its full-year rooms growth and earnings guidance for 2023.
Dive Insight:
Marriott expects to return $4.1 billion to $4.5 billion to its shareholders in 2023, an increase from its Q1 outlook of $3.6 billion to $4.1 billion.
The raised outlook comes after a strong second quarter for Marriott, bolstered by group and business transient demand domestically, Capuano shared in the report.
In the U.S. and Canada, many urban markets showed impressive growth in the second quarter, according to Capuano. And within customer segments, he said, group travel continued to perform extremely well, with revenue rising 10% above 2022.
“Business transient revenue also saw strong year-over-year growth, driven by solid average daily rate growth,” Capuano added. “Leisure transient revenue rose as well, albeit more slowly, as more travelers from the region chose to visit overseas destinations.”
In addition to strong performance fundamentals, Marriott saw significant portfolio growth in Q2. The company added approximately 33,100 rooms globally during the second quarter, a majority of which (17,300 rooms) were associated with its acquisition of the City Express brand portfolio from Hoteles City Express. The deal marked Marriott’s entry into the midscale segment, with properties in Mexico, Costa Rica, Colombia and Chile.
Marriott also entered the midscale segment in the U.S. and Canada in the second quarter with a new extended stay brand, dubbed Project MidX Studios. At the time of its launch in early June, Marriott was in discussions with owners for more than 250 development opportunities for the brand.
“Initial owner interest in our new offering has been tremendous,” Capuano said in the earnings report.
Another deal boosting Marriott’s rooms growth outlook is its recently announced long-term strategic licensing agreement with MGM Resorts International and the creation of MGM Collection with Marriott Bonvoy. Through the partnership, 17 MGM Resorts properties, the majority of which are located in Las Vegas, will be available for booking on Marriott.com and the Marriott Bonvoy mobile app.
With the deal, Marriott’s 2023 full year net rooms growth expectation was raised to 6.4% to 6.7%, Capuano said, up from the Q1 outlook of 4% to 4.5%.
