Marriott International reported its largest surge in travel demand since the pandemic began for its first quarter. But the strong quarterly results were soon overshadowed by the company’s conservative guidance.
By midafternoon Wednesday, the stock (ticker: MAR) had erased much of the session’s gains. It was up just 0.6% in recent trading, compared with a rise of more than 4% at market open.
Adjusted earnings of $1.25 a share in the first quarter beat analysts’ estimates of 90 cents, according to FactSet data. Revenue of $4.20 billion for the March quarter was higher than the $4.17 billion analysts predicted.
RevPAR, or revenue per available room, increased 96.5% year over year worldwide and 99.1% in the U.S. & Canada.
“During the first quarter, we saw the largest surge in global demand since the pandemic began in 2020,” said CEO Anthony Capuano. “Internationally, RevPAR gains were notable during the quarter in every region except for Greater China given the stringent travel restrictions resulting from the country’s dynamic zero-COVID policy.”
March was a solid month. Marriott’s worldwide occupancy rate increased from 45% in January, when travel was hurt by the Omicron variant, to 64% in March, although it fell short of prepandemic levels. Worldwide, the average daily revenue rate per room exceeded the 2019 level by 5%.
But RevPAR in the U.S. and Canada is expected to be roughly flat relative to 2019 levels for the remainder of 2022, management said in the earnings call. Internationally,
expects progress on RevPAR recovery to vary widely across regions.
The conservative North America outlook, Marriott said on the call, was driven by a lack of visibility on booking windows—the period between when the reservation is made and the actual arrival date. The company is seeing short booking windows in general, including for business travelers and especially for groups.
Airbnb (ABNB), on Tuesday, said bookings rose beyond prepandemic levels in the first quarter. Rival Hilton Worldwide Holdings (HLT) reported mixed earnings on Tuesday, but the hotel chain noted an increase in tourism and it is forecasting a strong summer.
authorized a quarterly cash dividend of 15 cents per share of common stock this month and said it is resuming share repurchases.
Marriott’s solid first-quarter earnings also allowed it to return capital to shareholders sooner than it expected. The board declared a $0.30 per share quarterly cash dividend for the end of the second quarter, or June.
Write to Karishma Vanjani at [email protected]