Systemwide second-quarter business travel revenue per available room at Marriott properties increased 4 percent year over year, a trend executives project will continue throughout 2024, they said Wednesday during the company's quarterly earnings call.
Total business transient room nights and average daily rate in the quarter also increased, Marriott president and CEO Anthony Capuano said. The sector comprised 33 percent of the company's second-quarter room nights, he said.
Small and midsized enterprises in the second quarter accounted for "nearly 55 percent" of business transient room nights, Capuano said, noting the segment "has grown significantly over the last few years." SMEs represented about 60 percent of business transient room nights in the second quarter of 2023, officials said last year.
Still, Marriott cut its projected full-year 2024 RevPAR to 3 percent to 4 percent above 2023 levels, down from its prior forecast of a 4 percent to 5 percent increase. Capuano said the change was mostly due to softening demand and rates in China.
"Worldwide RevPAR growth is still anticipated to be driven by another year of strong growth in group revenue, continued improvement in business transient revenues, and slower but still growing leisure revenues," Marriott CFO Leeny Oberg said on the call.
Group revenue per available room in the second quarter increased 9 percent year over year, Capuano said, including a 4 percent increase in average daily rate and a 5 percent increase in occupancy. Oberg added that the company expects a slowdown in group business in November due to the U.S. presidential election.
Business Access by Marriott Bonvoy, the company's travel management program option for SMEs, which was announced July 8, "is already seeing great interest," Capuano said. "We're extremely pleased with the initial account signups and users of the platform, both of which have outpaced expectations."
Marriott Q2 Metrics
Marriott's second-quarter systemwide RevPAR increased 4.9 percent to $135.52, and RevPAR in the U.S. and Canada increased 2.8 percent to $130.96.
Global occupancy increased 1.6 percentage points to 73.1 percent, while occupancy in the U.S. and Canada increased 0.4 percentage points to 70.1 percent.
Second-quarter systemwide ADR increased 2.4 percent year over year to $211.16. ADR in the U.S. and Canada increased 2.2 percent to $186.70
Total second-quarter revenue increased 6 percent year over year to more than $6.4 billion.
Net income also increased 6 percent to $772 million.
As with its full-year projection, Marriott forecast third-quarter RevPAR also in increase 3 percent to 4 percent year over year.
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