After a third quarter in which systemwide business transient revenue per available room increased 2 percent year over year, Marriott International is targeting 2025 corporate negotiated rate increases of "mid-single-digit" percentages year over year, president and CEO Anthony Capuano said Monday during a quarterly earnings call.
"And I think the teams are feeling pretty good about that target," Capuano added, though he noted that "we're relatively early in the process."
Marriott's October business transient "trends" were "strong," CFO Leeny Oberg said, balancing out what looks to be a softer November due to a demand slowdown around the Nov. 5 U.S. election. "We have meaningfully lower transient and group room nights on the books for both this week and next," she said.
Still, Capuano said business transient travel in the third quarter remained on a steady upward trajectory, now led by large corporates.
"We are encouraged by virtue of the fact that we continue to see RevPAR growth quarter-over-quarter in the business transient segment," Capuano said. "And to me, one of the most encouraging facets of that recovery is on the big corporates. It's been several years since we already got back to above pandemic levels of travel from the small and medium-sized companies, but the continued growth and the continued return to the road by the big corporates is an encouraging facet of the recovery."
Systemwide third-quarter group RevPAR increased 10 percent year over year, Capuano said, with group RevPAR for business slated for 2025 up 7 percent from the end of the third quarter of 2023.
Marriott Q3 Metrics
Marriott's systemwide third-quarter RevPAR increased 3 percent year over year to $131.72, while average daily rate increased 2.5 percent to $182.24 and occupancy increased 0.3 percentage points to 72.3 percent.
In the United States and Canada, Q3 RevPAR increased 2.1 percent year over year to $136.15, while ADR increased 2.3 percent to $186.48 and occupancy declined 0.2 percentage points to 73 percent.
The company projected systemwide fourth-quarter constant-dollar RevPAR to increase 2 percent to 3 percent year over year, and 3 percent to 4 percent for the full year, a projection maintained from the second quarter.
Total third-quarter revenue increased about 6 percent year over to nearly $6.3 billion, while net income was $584 million compared with $752 million one year prior.
Marriott said it had net rooms growth in the third quarter of 16,000 rooms year over year and now has about 9,100 properties worldwide with about 1.675 million rooms. Marriott's development pipeline totaled about 3,800 properties with 585,000 rooms.
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