Marriott International reported modest first-quarter
metrics, as net income dropped 11 percent year over year to $375 million but comparable
systemwide revenue per available room rose 1.1 percent, an improvement over the
fourth-quarter year-over-year increase of just 0.2 percent. President and CEO
Arne Sorenson said Marriott revenue from online travel agency bookings
worldwide declined 4 percent. While the corresponding reduction in commission
payouts may have helped properties' profitability, it likely depressed RevPAR
growth by a few tenths of a percentage point.
North American comparable systemwide RevPAR rose 0.8 percent,
"constrained by the partial federal government shutdown in January, tough
comparisons to hurricane recovery in Florida and Houston and the lingering
impact of a fourth-quarter labor strike in Hawaii." Excluding these
factors, Sorenson said, the company estimates systemwide RevPAR growth would
have been 70 basis points better.
Transient first-quarter RevPAR from Marriott's 300 largest corporate
accounts in North America rose 3 percent year over year in the first quarter,
but overall transient RevPAR was flat due to weak demand in March. Group RevPAR
in North America also increased 3 percent, on strong citywide demand in Atlanta
and San Francisco, as well as Easter's shift to the second quarter. Still, the
overall group booking pace for full-year 2019 is flat, despite a surge in group
bookings in April.
Outside North America, systemwide RevPAR increased 1.9
percent.
Worldwide, Marriott's average daily rate rose 1.5 percent to
$160.24. Global occupancy declined 0.3 percentage points to 68.7 percent. Membership
in the Marriott Bonvoy loyalty program increased by nearly 5 million during the
first quarter to just under 130 million. Forty percent of the new members are from
China.
The company opened its 7,000th property, the St. Regis Hong
Kong—one of 114, totaling 19,000 rooms, opened during the quarter. About 3,000
rooms were converted from competitor brands and approximately 8,000 were outside
North America. As of March 31, Marriott had 7,003 properties and timeshare
resorts with more than 1.3 million rooms, two-thirds of them in North America.
Fifteen properties totaling 2,693 rooms left the system. The pipeline totaled
2,853 properties with about 475,000 rooms, nearly 216,000 of which are under
construction.
Q2 & Full Year
Outlook
For the second quarter, Marriott expects comparable
systemwide RevPAR on a constant dollar basis to increase between 1 and 2
percent in North America, between 2 and 4 percent outside North America and between
1 and 3 percent worldwide. For 2019 overall, RevPAR guidance is between 1 and 3
percent for North America, between 2 and 4 percent outside North America and between
1 and 3 percent worldwide. Room additions for the year are anticipated to reach
5.5 percent and deletions between 1 and 1.5 percent.
Homesharing
Following on last
month's announcement that Marriott is getting into the homesharing
business, Sorenson explained that a 2018 survey found that more than a quarter
of Marriott loyalty program members had used home rentals in the prior 12
months. In the homesharing pilot
Marriott conducted in a few European cities last year, nearly 90 percent of
guests were Bonvoy members and more than 80 percent were on leisure trips. The
average length of stay was nearly triple that of a typical hotel guest. These
findings led Marriott to launch its Homes & Villas brand, which will fully
integrate into the Bonvoy program.
Sorenson's Health
Sorenson also addressed last week's announcement that he had
been diagnosed
with cancer: "The medical team at Johns Hopkins believe it was caught
early, it's operable and the course of treatment is proven. I'm grateful for
your messages of support. We are going to soldier on."
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