Marriott International CEO Anthony Capuano touted another “great” quarter during the company’s third-quarter earnings call Thursday, telling analysts that global travel demand “remains strong” overall.
However, overseas demand remained strong, with Marriott's international RevPAR up 22% year-over-year in 2022, driven primarily by “significant gains” across Asia.
“We are within 1 percentage point of cross-border travel returning to pre-pandemic levels,” Capuano said, adding that “further upside is expected in the Asia-Pacific region,” with international air traffic in Greater China expected to increase from about 15% of 2019 capacity in the third quarter to about 60% by the end of the year.
Demand from outbound travelers from the U.S. and Canada also helped drive international performance. According to Capuano, third-quarter leisure room nights from U.S. and Canadian guests traveling outside the region were up about 25 percent year-over-year.
Group demand shows 'remarkable' strength
Also showing “notable” strength in the third quarter was group demand, which Capuano said “is expected to be a meaningful driver of revenue growth going forward.” Marriott’s fourth-quarter 2023 group revenue in the U.S. and Canada is expected to increase 12% year-over-year as of the end of September, with full-year group revenue expected to increase 19%.
Marriott's leisure demand also remained strong, with global leisure revenue up 9% year-over-year in the quarter, and leisure revenue in the U.S. and Canada up 4% during the same period.
Finally, business temporary demand continued its “slow but steady” trend, with business temporary revenue in the U.S. and Canada up 4%, driven largely by “steadily improving demand” from companies in the technology and financial sectors.
In the third quarter, Marriott reported system-wide RevPAR growth of 8.8%, or about $130. Occupancy for the quarter increased 3.2 percentage points to 72.1%, and ADR increased 4.1%, or about $180.
Marriott reported third-quarter net income of $752 million, up from $630 million in the year-ago quarter. Revenue for the period was $5.9 billion, up from $5.3 billion in the third quarter of 2022.