Once a novelty beverage, boba or bubble tea has moved into the mainstream.
31.07.2024 - 22:52 / skift.com / Anthony Capuano / Sean Oneill
Marriott International signaled confidence in continued growth on Wednesday, forecasting a strong overall global performance for the year despite noting some storm clouds on the horizon.
Executives highlighted a softening in China, rising caution by travelers in spending, and more-than-expected bookings weakness in November around the U.S. presidential election as developments they’re watching.
The world’s largest hotel operator said it expected its revenue per available room (RevPAR), a key sector metric, to grow between 3% and 4% this year. That represented a lowering of the top end from 5%, which had been the forecast in May.
Executives on an earnings call blamed the adjustment in outlook on greater-than-expected weakness in China. China’s RevPAR fell 4% year-over-year in the quarter.
The company also said that group bookings for the first half of November faced headwinds because of the U.S. presidential election. They also noted some trends suggesting that travelers were being more “judicious” about travel splurges.
However, Marriott’s management was broadly bullish.
“We delivered another strong quarter as travel demand remained robust in most markets around the world, and our net rooms grew by 6% year-over-year,” said Anthony Capuano, president and CEO.
The upcoming U.S. presidential election is expected to impact travel patterns, potentially affecting Marriott’s performance in its home market.
“We also expect marginally lower full-year RevPAR in the U.S. and Canada than we had previously anticipated in part due to less group business, the first 2 weeks of November, given the intense focus on the U.S. presidential election,” Oberg said.
“When you look back over prior election cycles, we tended to see a little bit of roof softness the week of election,” Oberg said.
“Given the unique attributes of this election cycle, we’re seeing that bleed into the week after the election as well,” Oberg said. “So, about half of November is feeling the impact on the group side.”
Marriott joined other companies in noting a “wealth gap” in demand.
“When you look at premium and luxury, that overall is stronger than it is at the lower chain segments,” Capuano said.
Executives said spending by leisure travelers was still growing, albiet slowly and with an emphasis on higher-end hotels and resorts.
Leisure transient, which accounted for 43% of worldwide room nights in the quarter, posted a 2% rise in RevPAR.
Capuano put that figure into context: “Over the last five years, RevPAR in the leisure segment has been up about 40%, so to continue to see quarter-over-quarter improvement in leisure RevPAR on the shoulders of that sort of recovery for us is quite encouraging.”
Hotel guests were slightly less likely to splurge on
Once a novelty beverage, boba or bubble tea has moved into the mainstream.
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