Marriott's Q1: Luxury is a standout, vacation rentals is a focus

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Marriott reported its first-quarter 2022 earnings this week. The company posted net income of $337 million.
Marriott reported its first-quarter 2022 earnings this week. The company posted net income of $337 million. Photo Credit: Courtesy of Marriott International

Marriott International reported a swift rebound in global demand through the latter part of the first quarter, with the company's global average daily rate (ADR) for March surpassing March 2019 levels by 5%, according to Marriott CEO Tony Capuano.

Marriott's worldwide RevPAR for March was 9% below the same period in 2019. Global occupancy in March came in at 64%.

Where the recovery is

Although progress was made across all chain scales and market types, the company reported standout rate growth within its luxury sector, which saw ADR surge 27% above pre-pandemic rates during the quarter.

"Many countries have started to cautiously adopt a 'live with Covid' policy, leading to a rise in demand for all types of travel," Capuano told investors during the group's first-quarter earnings call Wednesday. "Leisure demand, which had already fully recovered during 2021, has further strengthened this year. Recovery of business transient and group demand is still lagging leisure, but as greater numbers of employees return to the office, demand has been rapidly improving."

For the quarter ended March 31, Marriott saw global leisure room nights increase more than 10% on 2019.
On the group demand front, the company reported a sharp acceleration in the U.S. and Canada in the first quarter, while business demand in the U.S. also gained momentum.

A focus on vacation rentals

Looking ahead, Capuano added that Marriott would remain focused on bolstering its resort and vacation rental offerings.

"We have been very focused on continuing to accelerate the growth of our resort portfolio," said Capuano. "We saw, both from a development perspective and a guest perspective, tremendous appetite for all-inclusive experiences in certain markets and whole-home rentals for certain trip types. You will continue to see us look at organic growth and all of those areas."

Marriott's Q1 numbers

Globally, Marriott saw its first-quarter RevPAR grow 96.5% over the same period in 2021, to just over $89. The company's systemwide occupancy rate was 54.5% for the quarter, while first-quarter ADR rose 36.5%, to $163.60.

Marriott reported first-quarter revenue of $4.2 billion, which marked an 81% increase compared with the same quarter last year. The company posted a net income of $377 million versus a net loss of $11 million in Q1 2021.

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