Latest news with #Oberg
Yahoo
06-05-2025
- Business
- Yahoo
Marriott's Declining US Government Demand Leading to 'Softer' Growth
Al Drago / Bloomberg via Getty Images Key Takeaways Marriott International CFO Leeny Oberg said on the hotel chain's first-quarter earnings call Tuesday that the company expects a "continuation of declines" in U.S. government bookings. Marriott lowered its full-year worldwide revenue per available room, or RevPAR, growth forecast to a range of 1.5% to 3.5% from the prior 2% to 4%. Rivals Hyatt Hotels and Hilton Worldwide Holdings also lowered their full-year RevPAR growth forecasts in recent days. Marriott International (MAR) CFO Leeny Oberg said on the hotel chain's first-quarter earnings call Tuesday that the company expects a "continuation of declines" in U.S. government bookings. Marriott on Tuesday reported first-quarter adjusted earnings per share of $2.32 on revenue of $6.26 billion. Analysts polled by Visible Alpha expected $2.25 and $6.22 billion, respectively. It also posted comparable systemwide revenue per available room, or RevPAR, growth of 4.1% worldwide, above the consensus projection of 3.0%. However, Marriott lowered its full-year worldwide RevPAR growth forecast to a range of 1.5% to 3.5% from the prior 2% to 4%. The new outlook "incorporates somewhat softer expectations in the U.S. & Canada region," Marriott said. 'Continuation of Declines in US Government Demand' On Marriott's earnings call with analysts, Oberg said the lowered RevPAR growth forecast "is primarily due to an expected continuation of declines in U.S. government demand," according to a transcript provided by AlphaSense. In 2024, Oberg said, "the U.S. Government segment contributed around 4% of the U.S. and Canada region's room nights," and March brought "a 10% year-over-year decline in US government RevPAR" amid broad federal layoffs. Rivals Hyatt Hotels (H) and Hilton Worldwide Holdings (HLT) also lowered their full-year RevPAR growth forecasts in recent days. Marriott shares were up 1.6% in recent trading but are down about 10% for the year. Read the original article on Investopedia
Yahoo
11-02-2025
- Business
- Yahoo
Marriott's Latest Report: 9 Things We Learned
Marriott International has seen continued strength in travel demand, particularly in international markets, and an 8% rebound in group bookings. Marriott, which operates over 9,300 properties worldwide, reported its fourth-quarter earnings on Tuesday, discussing key performance gains as the group undertakes a major technology overhaul and expands its loyalty program, which added more than 31 million new members last year. "Fourth quarter leisure revenue per available room was 6% globally and 4% in the U.S. and Canada, driven by gains in both room nights and average daily rate, with strength across all tiers from luxury to select service," said president and CEO Anthony Capuano. Marriott's net profit margin was 34%. It reported a profit of $455 million on revenue of $1.3 billion (after subtracting revenue it must pass on to its managed and franchised properties). The Bethesda, Maryland-based hotel operator showed strong pricing power. In the fourth quarter, it boosted rates without sacrificing occupancy. Its worldwide growth in revenue per available room, or RevPAR, came in at 5% year-over-year, well over analyst expectations. This was heavily driven by the company's properties outside of the U.S. and Canada. "RevPAR [revenue per available room] has been excellent," said Leeny Oberg, CFO and executive vice president of development. The hotel operator saw especially robust international leisure demand in Asia-Pacific, Europe, the Middle East, and Africa. "There have been many predictions of the end of the run on leisure [travel bookings]," Capuano said. "Understandably so. Since 2019, you've seen a 40% improvement in leisure RevPAR." "It's normalizing," he said, forecasting "flat" growth in leisure RevPAR this year. "Group was the big winner of 2024, up at about 8% for the full year," Oberg said, referring to room bookings for groups typically for meetings and events. "At the end of 2024, global group revenues were pacing up 6% for 2025 and 10% for 2026 on increases in both room nights and average daily rate," Oberg said. Marriott had a 6.8% net increase in room count worldwide last year. In the U.S. and Canada, about one out of every three hotel rooms opened in 2024 were in the Marriott system. It expects its net room growth to be between 4% and 5% this year. Executives sounded an upbeat note on their hotel development outlook. They saw a modest acceleration in new construction starts in 2024. However, new builds remained below 2019 levels partly because lending remained restrained. In 2024, Marriott saw the fees it charges banks for its co-branded credit cards rise 10%. However, executives expect the pace of growth in these fees to be "a few hundred basis points lower" in 2025. Its biggest partners are the card issuers JPMorgan Chase and American Express. An analyst asked about Marriott's appetite for additional tuck-in acquisitions this year. "We will certainly consider a tuck-in acquisition," Capuano responded. "The vast, vast majority of our room growth will be organic growth." Marriott added over 31 million new members to its loyalty program last year, growing to nearly 228 million members at year-end. Capuano said there was an opportunity to boost sign-ups among younger travelers by adding more of the types of properties they tend to visit. Marriott has, in the past couple of years, introduced three new brands (Four Points Flex, Studio Res, and City Express by Marriott) that are more affordable (in the "midscale" segment). As of December, it had over 300 open and pipeline properties in this tier, which should attract disproportionately more younger travelers than some of its upscale and luxury hotels have traditionally done. Marriott also plans to have more on-property promotions to encourage sign-ups. Marriott is embarking on a technology overhaul that will span its reservations systems, property management infrastructure, and loyalty program, with initial rollouts beginning in late 2024. It is expected to take "a couple of years" to implement globally, according to Oberg. The goal is to streamline operations and enhance revenue opportunities. The hotel giant expects benefits across key stakeholder groups: simplifying training for staff, particularly to attract younger workers. It also wants to drive both cost efficiencies and revenue growth for property owners through an integrated shopping platform for amenities like spa services, dining, and golf. (For context, read Skift's "Hotels Will Start Selling So Much More Than Rooms.") One analyst asked if Marriott had seen any sign that Canadian and Mexican travelers were canceling reservations for U.S. stays in response to recent tariffs-related political tensions. Executives said it was too early to say. Similar to its rival Hilton, Marriott sees the "business transient" segment of customers — think a traveling salesperson booking traveling solo — as the segment with the most opportunity. It's the only segment of guests that has yet to recover to pre-pandemic demand levels. Executives also noted the potential for special corporate negotiated rates to gain more ground in 2025. Marriott boss Anthony Capuano outlined his vision to transform the company from a traditional hotel group into an all-encompassing travel enterprise. This change will demand the company be fast and nimble, such as by streamlining decision-making. Marriott boss Anthony Capuano outlined his vision to transform the company from a traditional hotel group into an all-encompassing travel enterprise. This change will demand the company be fast and nimble, such as by streamlining decision-making. Read More What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares. The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial sector performance. Read the full methodology behind the Skift Travel 200. Get breaking travel news and exclusive hotel, airline, and tourism research and insights at Sign in to access your portfolio
