Marriott International beat its first-quarter demand-growth
estimate and boosted its 2017 revenue per available room (RevPAR) forecast on
better-than-expected group demand in the North America and increased revenue at
its Europe, Asia Pacific and Africa hotels.
Marriott shares were up about 7% at about 10:30 a.m. Eastern
time Tuesday morning and touched all-time record high.
Marriott's global RevPAR, excluding currency changes, rose
3.1% from a year earlier, which beat its February forecast of 1% to 3%. North
America RevPAR advanced 3.1% as Washington, D.C., demand rose on January's
presidential inauguration and Women's March, while Hawaii hotels drew more
visitors from West Coast U.S. residents escaping bad weather and Canada
properties benefited from the relatively weaker Canadian dollar and the country's
celebration of its 150th anniversary.
Europe RevPAR rose
7% on strong group demand in the U.K. and Germany, while Egypt and South Africa
RevPAR rose 18% and 9% from a year earlier, respectively. Asia Pacific RevPAR
advanced 4.9%.
As a result, Marriott boosted its full-year RevPAR growth
forecast to about 2% from its February forecast of about 1.5%. Marriott
acquired Starwood last September.
"We are getting a little bit of juice by bringing these
two companies together," Marriott CEO Arne Sorenson said on a conference
call with analysts Tuesday morning. "We feel a bit more encouraged about
corporate travel than we did a quarter ago."
Among Marriott's brands, growth at full-service badges
outpaced that of select-service brands in North America. RevPAR growth at both
JW Marriott and Westin exceeded 4.5%, while Sheraton's RevPAR advanced 3.5%. RevPAR
growth at W and Courtyard lagged at 0.1% and 1.2%, respectively.
As for Sheraton, owners of the "bottom" U.S.
properties in terms of guest-survey data have started renovations, while the
company has reached agreements with "two or three" Sheratons to leave
the system, Sorenson said Tuesday.
As for recent reports that hotel trade group American Hotel
& Lodging Association (AH&LA) is stepping up its lobbying efforts to
portray OTAs Priceline and Expedia as monopolistic, Sorenson deflected the
question, noting that his concern was more with so-called "rogue"
OTAs that falsely give the appearance that the guest is booking a room through
the hotel company.
"I don't have much to say about industry efforts on the
Hill," Sorenson said.
Marriott's first-quarter net income, factoring in Starwood's
results last year, rose 26% from a year earlier to $265 million on lower operating,
interest and general and administrative costs. Revenue was little-changed at
$5.56 billion.