Marriott International's systemwide first-quarter business transient revenue per available room grew 1 percent year over year, driven by a 3 percent increase in average daily rate, Marriott CEO Anthony Capuano detailed Wednesday during a company earnings call.
In the United States and Canada, first-quarter business transient RevPAR rose 2 percent year over year, fueled by a 3 percent increase in ADR. Capuano said government transient RevPAR declined 12 percent and 13 percent year over year in January and February, respectively, but rose 8 percent in March.
Though much of the growth in systemwide and U.S. and Canada business transient RevPAR during the quarter came from increases in rate rather than room nights, it still marked an improvement from recent quarters when such RevPAR either remained flat or declined. Hilton Worldwide and Hyatt Hotels Corp. reported similar lifts in the segment during their recent earnings calls.
Marriott first-quarter group RevPAR increased 5 percent both on a global basis and in the U.S. and Canada.
"We're very pleased with group performance in the quarter, and we expect group to be a nice driver of growth for the remainder of the year," Marriott EVP and CFO Jennifer Mason said during the call. "Our pace for the year is up about 5 percent. While pace is not indicative of where group RevPAR will actualize, we certainly are encouraged by the base of business on the books."
Middle East Impact
First-quarter RevPAR for the Middle East and Africa region declined 1.9 percent year over year, stemming from a 5.4 percentage-point drop in occupancy to 61.6 percent.
RevPAR for the Middle East alone in March plummeted 30 percent year over year and is expected to fall 50 percent in the second quarter, according to Mason.
Capuano added that the company expects the greatest financial effects from the war in Iran will be in the second quarter, but that "air capacity and travel sentiment will continue to be impacted, particularly in the Middle East through the end of the year."
Questioned about any bookings uptick in the region stemming from the ceasefire enacted in early April, Mason said Marriott has seen "some signs of recovery from the lows that we experienced in March."
Marriott Q1 Metrics
Marriott's systemwide first-quarter RevPAR grew 4.2 percent year over year to $123.09. Average daily rate increased 3.1 percent year over year to $187.70, and occupancy rose 0.7 percentage points to 65.6 percent.
Marriott revised its full-year RevPAR growth outlook to 2 percent to 3 percent year over year, up from its previous projection of 1.5 to 2.5 percent. Second-quarter RevPAR is projected to increase 1.5 percent to 2.5 percent year over year.
Total first-quarter revenue increased 6 percent year over year to more than $6.6 billion. First-quarter net income decreased 3 percent year over year to $648 million.
As of March 31, Marriott global pipeline was more than 4,100 properties or 618,000 rooms, a 5 percent year-over-year increase.
The Marriott Bonvoy membership base reached nearly 283 million members worldwide at the end of the quarter.
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