The group's business was “once again the standout segment” for Marriott International in the fourth quarter, and Marriott CEO Anthony Capuano told analysts on the company's fourth-quarter earnings call Tuesday that the group is “on track for another strong year in 2024.”
According to Capuano, the group's business accounted for 23% of Marriott's total room nights in the fourth quarter, and group revenue grew 9% globally and 7% in the U.S. and Canada.
Additionally, as of the end of 2023, Marriott's 2024 total group revenue is projected to increase approximately 13% globally and 11% in the U.S. and Canada.
Marriott's CFO and vice president of development, Renee Oberg, said 75% of the group's projected 2024 business is already planned, up from 65% of the group's projected 2023 business a year ago.
While the group saw its most dramatic gains in Q4, leisure demand remained strong, with Q4 sales up about 50% over the same quarter in 2019.
Capuano also reported that business travel continues to improve. Small businesses have led the pandemic rebound, but large businesses “continue to see volume growth,” Capuano said.
Marriott said fourth-quarter business travel revenue rose 7 percent globally and 3 percent in the U.S. and Canada.
“Demand for all types of travel remains strong, despite the pandemic-induced rebound having waned,” Capuano said.
Big rebound in China
In terms of regional performance, Marriott’s Asia Pacific business experienced the largest year-over-year increase in revenue per available room (RevPAR), driven primarily by an 81% surge in China. Asia Pacific RevPAR increased 13% in the fourth quarter, while the U.S. and Canada were up 3%.
Marriott's annual outlook takes into account a “steady but slow-growing global economy,” according to Capuano.
“This also reflects normalised accommodation demand across most parts of the world, with Asia Pacific expected to see stronger growth than other regions as it continues to benefit from the COVID recovery and additional international air traffic,” he added.
In the fourth quarter, Marriott reported systemwide RevPAR growth of 7.2%, or just over $121. Occupancy for the quarter increased 2.6 percentage points to 67%, and average daily rate (ADR) increased 3% to about $180.
Marriott reported fourth-quarter net income of $848 million, up from $673 million in the fourth quarter of 2022. Revenue was about $6 billion, up from $5.9 billion in the fourth quarter of 2022.
