(This May 2 story has been refiled to say Marriott gets a 'big portion,' not 'bulk' of its revenue from outside the US, in paragraph 6)
Marriott International Inc (MAR.O) reported better-than-expected first-quarter results on Tuesday as the U.S. hotel operator benefited from a global rise in occupancy and room revenue led by domestic travel in China, sending its shares up by 3%.
U.S. hotel operators who have been grappling over the past year with an uneven recovery in Chinese demand are now benefiting from pent-up-demand throughout Asia Pacific, particularly in Greater China.
That has boosted operators just as a worsening economic outlook in the U.S. threatens to dampen consumer spending in the second half of the year.
"While macroeconomic uncertainty persists, it has not weighed on travel demand to date. In fact, demand continued to rise across all customer segments in the quarter," Marriott CEO Anthony Capuano said on a call with investors.
Shares of Hyatt and Hilton increased 1.4% and 1.2% respectively.
Marriott, which receives a big portion of its revenue from outside the United States, said a faster than expected recovery in international markets and continued solid booking trends boosted its full-year guidance for RevPAR, revenue per available room.
In the Greater China region RevPAR rebounded to 95% of pre-pandemic levels during the quarter while Mainland China RevPar fully recovered to 2019 levels. The company said it is seeing business and leisure segments in China recover in line with each other in contrast to the U.S where recovery has been staggered.
"First quarter hotel performance came in a bit better than expected and will likely be the high-water mark for the year," said CoStar Group National Director of Hospitality Analytics Jan Freitag. He said he expects slower growth, but growth nonetheless, despite the risk of a recession.
For the first quarter ended March, Marriott reported an adjusted profit of $2.09 per share, compared with the average analyst estimate of $1.84 per share, as per Refinitiv data.
Revenue rose 34% to $5.62 billion, ahead of analysts' average estimate of $5.41 billion.
