Marriott International reported mixed second-quarter results, with global revenue per available room (RevPAR) rising 1.5% but U.S. and Canada performance staying flat amid a pullback in government travel spending.
The government travel decline had an outsized impact on Marriott's select-service and extended-stay hotels, with CEO Anthony Capuano saying during Tuesday's Q2 earnings call that their results came in below expectations. In the U.S. and Canada, RevPAR for Marriott's select-service and extended-stay brands declined about 1.5%.
Marriott CFO Leeny Oberg said government travel room nights in the U.S. and Canada plummeted 16% in the quarter. Capuano estimated that government workers represent roughly 4% of all room nights in the U.S. and Canada.
Looking ahead to Q3, Oberg said Marriott expects government demand to remain weak.
Luxury continues to flourish
Marriott's luxury brands continued to perform well, with luxury RevPAR rising 4% in the U.S. and Canada. Luxury food and beverage also was a bright spot, with Capuano highlighting that luxury F&B spending was up 7% in the U.S. and Canada during the quarter.
Marriott's international performance was strong in the quarter, with international RevPAR up 5%. APEC (Asia Pacific excluding China) RevPAR surged 9% driven by strong rate growth and higher international demand, while EMEA (Europe, the Middle East and Africa) saw RevPAR rise 7% on solid increases in both rates and occupancy.
Broken down by customer segment, global business transient RevPAR declined 2%, global leisure transient RevPAR rose 3%, and group RevPAR rose 2%.
For the full year, Marriott expects systemwide RevPAR growth to land in the lower end of its 1.5% to 2.5% forecast range, with Capuano citing "ongoing economic uncertainty."
For the quarter, Marriott reported total revenue of $6.74 billion, a 4.7% increase, while adjusted EBITDA grew to $1.4 billion, up from $1.3 billion in the same quarter last year.