Improvement for Large Corporate Accounts ‘Moderates,’ Says Marriott
Hotel operator sees full recovery for SMEs >>
by: Harvey Chipkin
The rate of recovery for large corporate accounts has slowed, while demand from small and mid-sized businesses has fully recovered to 2019 levels, according to Marriott International executives speaking on a third quarter earnings call. Anthony Capuano, CEO, said the company is “encouraged by the sequential quarter-over-quarter improvement in business transient.”
Business transient demand in the US and Canada, said Capuano, increased to 11% below the same period in 2019, compared with 13% down in the second quarter. Meanwhile, small and medium-sized companies, which account for about 60% of business travel room nights, are fully recovered — with room nights up about 10% in the quarter against 2019.
For larger companies, especially in the technology sector, demand levels were down 29% from 2019. Leeny Oberg, CFO, said the company does look for the segment to get back to where it was;, however, there has been a moderation in the rate of improvement into the third quarter, and the company expects that moderation to continue.
As for rate, Capuano said that after two years of the company holding corporate rates steady, early indications are for growth at least in the high single digits, year over year. Worldwide revenue per available room (RevPAR) in September reached a record high, excluding Greater China. The company’s operating income in the quarter was $958 million, almost twice the 2021 third quarter income of $545 million.
Marriott reported a pipeline of more than 3,000 properties and 502,000 rooms. About 204,800 rooms in the pipeline were under construction as of the end of the third quarter. Capuano said this was the 20th straight quarter with more than 200,000 rooms under construction globally.
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