Marriott: Q3 Corp. Transient Progress Slowed, Group Enterprise ‘Accelerated Properly’


Marriott Worldwide’s company transient and group
enterprise proceed to indicate enchancment in the course of the restoration, however the former took
a bit extra of a success in the course of the third quarter, mentioned Marriott CEO Anthony Capuano
on a Wednesday quarterly earnings name.

“Within the U.S. and Canada, particular company was the section
most impacted by the delta variant in the course of the quarter, given the delay within the
return to workplace timelines,” Capuano mentioned, explaining that the corporate
identifies particular company as enterprise transient clients who guide at
pre-negotiated charges. “The [segment] offers us the most effective indication of
enterprise demand developments. Particular company bookings confirmed regular restoration every
month this 12 months till we noticed a slight pullback within the again half of the third

Capuano added that the section’s upward trajectory returned
in October with bookings versus 2019 rising every week in the course of the month,
particularly for sure verticals. “Accounting and consulting grew 35
p.c over what we noticed final month, and know-how enterprise grew about 31
p.c versus final month,” he mentioned. General, “particular company
bookings are at the moment down lower than 40 p.c in comparison with the identical time
body in 2019.”

Primarily based on conversations with company shoppers, Marriott
expects a restoration in enterprise transient to steadily proceed as extra employees
return to the workplace, visitor visitation insurance policies are relaxed and a larger
variety of staff are permitted to journey once more. 

As well as, traditionally, Marriott’s enterprise transient
enterprise coming from small and midsize corporations was about 60 p.c of
enterprise transient income. In the course of the restoration, SMEs have been accounting for
about 75 p.c of the corporate’s enterprise transient income, Capuano mentioned. As
a consequence, a few of that SME enterprise has been in additional secondary and tertiary
markets, mentioned Marriott CFO Leeny Oberg. “Nonetheless, in the course of the third
quarter, we noticed the most effective enchancment in our massive cities in particular company
that we have seen for the reason that pandemic. So, it’s completely shifting in the proper
path, together with these bigger cities.”

Group on the Rise

Group enterprise, in the meantime, “accelerated properly”
in the course of the quarter within the U.S. and Canada. “Group room revenues for the
quarter have been down 46 p.c versus the third quarter of 2019, a major
enchancment in comparison with the second quarter’s decline of 76 p.c versus the
identical time interval in 2019,” Capuano mentioned, including that social teams have been
significantly sturdy.

Additional, U.S.-managed group bookings beat 2019 ranges for
every of the final 5 months by October, as event-booking home windows have
shortened in the course of the pandemic, he mentioned. “In-the-quarter-for-the-quarter
bookings in October have been above [those] from October 2019 by over 30 p.c,
which is the best share enhance we have seen for the reason that starting of the

According to different lodge firm quarterly studies, group
common every day charges have continued to rise, and “for full-year 2022, it is
at the moment pacing practically 4 p.c above pre-pandemic ranges,” Capuano

Q3 Key Efficiency Metrics

Marriott’s third-quarter 2021 comparable systemwide income
per out there room, adjusted for forex fluctuations, elevated 118 p.c worldwide,
135 p.c within the U.S. and Canada, and 76 p.c in all different markets 12 months
over 12 months. In contrast with 2019, RevPAR declined 26 p.c worldwide, 20 p.c
within the U.S. and Canada, and 41 p.c in all different markets. 

Worldwide occupancy was 58.2 p.c for the quarter, up
23.4 share factors from 2020. Common every day fee was $155.21, a 30.6
p.c year-over-year enhance. Each occupancy and ADR elevated in contrast with
the primary and second quarters of 2021, with ADR down solely about 4.4 p.c in
the third quarter in contrast with the third quarter of 2019, in response to a
firm submitting with the U.S. Securities and Trade Fee. 

“We have been very happy to see fee virtually again at
pre-pandemic ranges in simply 20 months,” Oberg mentioned. “Compared,
international ADRs have lagged the restoration in RevPAR in prior downturns, taking
round 5 years to rebound after the 2009 recession and round 4 years to
recuperate put up 9/11.” 

The corporate reported greater than $3.9 billion in revenues for
the quarter, in contrast with $2.3 billion one 12 months in the past. It additionally reported $220
million in internet revenue versus $100 million within the third quarter of 2020. 

Visitor-Room Progress

Marriott added roughly 17,500 rooms globally throughout
the third quarter, together with greater than 2,200 conversion rooms. “We have
already added extra conversion rooms within the first 9 months of this 12 months than
we did in all of 2019,” Capuano mentioned, including that the corporate expects 2021
internet rooms progress to be roughly 3.5 p.c. 

As of Sept. 30, the corporate’s worldwide pipeline totaled
2,769 properties with practically 477,000 rooms. Greater than 206,000 of these rooms
have been below development as of the tip of the quarter.

Q2 earnings

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