Marriott International during the second quarter and in July experienced what it called a widespread rebound in business travel bookings, with special corporate bookings in June up 23 percent from May, executives said Tuesday during the company's second-quarter earnings call. Such bookings during the first three-and-a-half weeks of July then increased 27 percent from the commensurate June period, according to Marriott.
"We are optimistic that we have turned a corner," Marriott CEO Anthony Capuano said.
Capuano said the increase in corporate bookings was widespread across industries, and executives expect the rebound to continue after Labor Day, when children return to school and some offices are scheduled to reopen to in-person work. Special corporate booking rates during the first three weeks in July remained about 45 percent lower than those weeks in 2019, he said.
Without releasing specific figures, Capuano added that booking windows for business travel have lengthened, suggesting that business travelers are more frequently blending work trips with leisure travel. "This blending of trip purpose continues to be a real and measurable phenomenon, and we think it's good for our business, and we think it will continue well beyond the end of the pandemic," he said.
Capuano also pushed back against suggestions that at least a segment of business travel volume would be lost permanently even post-pandemic to virtual conferencing tools.
"We are optimistic about the return of business travel," Capuano said. "We talk to about 700 corporate travel managers every month, and we are hearing anecdotally from our customers, particularly those that are in customer service businesses, law firms, accounting firms, consulting firms, that it is critical to their business that they would be on the road and in-person with their customers."
Group Rebound Continues
Meanwhile, group business continued to rebound as well, with such bookings in June for all future dates down 29 percent from June 2019 levels, Capuano said, adding that the comparative decline in March was 56 percent.
"Most importantly, our sales team is holding on to average daily rate," he added. Average daily rate "for group bookings is almost flat for the fourth quarter and 3 percent higher for full-year 2022 compared to the same periods in 2019."
Capuano said Marriott executives were monitoring the delta variant of Covid-19 and the pace of vaccinations globally, but remained optimistic for the balance of 2021.
Financial Performance
Second-quarter comparable Marriott systemwide constant-dollar revenue per available room increased 262.6 percent year over year, and declined 43.8 percent compared with the second quarter of 2019. Global occupancy reached 50.8 percent, down 24.1 percentage points from the second quarter of 2019, and ADR was $138.28, off by 17.2 percent compared with two years prior.
For the U.S. and Canada, RevPAR declined 39.5 percent from the second quarter of 2019.
Executives indicated they were optimistic rates would continue to recover.
"We are optimistic that rate recovery will occur faster than in prior downturns, when ADR gains lagged occupancy gains," Marriott CFO Leeny Oberg said. "It's been very encouraging to see that in Mainland China ADR has come back in tandem with demand."
Marriott reported second-quarter net income of $422 million, compared with a net loss of $234 million one year prior.
Development Pipeline
Marriott added 149 new properties with 24,909 rooms globally during the second quarter. About 5,300 of those rooms were conversions, and the company added roughly 13,000 rooms in international markets, according to Marriott.
The company's worldwide development pipeline totaled approximately 478,000 rooms. More than 212,000 rooms in the pipeline were under construction as of June 30.
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