Key Takeaways
- Marriott International executives said on a conference call Tuesday that business travel has mostly returned to pre-pandemic levels—though not at the beginning of the week.
- “Monday, Tuesday, Wednesday are still the nights whose occupancy has not recovered while the other nights of the week are actually higher occupancy than we had pre-COVID,” CFO Leeny Oberg said.
- Marriott’s Q4 results topped analysts’ estimates, but its shares slipped as it issued a soft outlook for room growth and profit
Business travel has mostly returned to pre-pandemic levels—except at the beginning of the week, hotel executives said.
“You are seeing overall occupancy of our global system as being higher than 2019 levels,” Marriott International (MAR) CFO Leeny Oberg said on a Tuesday conference call with analysts, a transcript of which was provided by AlphaSense. “But Monday, Tuesday, Wednesday are still the nights whose occupancy has not recovered while the other nights of the week are actually higher occupancy than we had pre-COVID.”
That’s partly due to changes in the way flexible work policies have changed staffing needs throughout the week. “Key chunks of business travel” still haven’t returned post-COVID, according to Gary Leff, travel expert and proprietor of the website View From the Wing.
“The archetypal road warrior was the out Monday morning/back Thursday night consultant who spent the week at client offices,” Leff said. “That travel hasn’t returned, because even where companies have ‘returned to office,’ that doesn’t mean every employee, every day, and so it’s not necessary to have as many consultants physically on-site either.”
Business travel remains behind 2019 levels at the biggest companies, according to Marriott executives.
“The small- and medium-sized businesses came back faster than the largest corporates,” Oberg said. “You still see their nights meaningfully behind 2019 levels, although I will say that some other of those large corporates like in the financing sector of the economy, they are actually back.”
Marriott’s worldwide revenue per available room (RevPAR) increased 5% year-over-year in the fourth quarter, above analysts’ expectations, but group RevPAR grew by a smaller amount.
“Group RevPAR, which comprised 23% of room nights, rose 3% in the quarter,” CEO Anthony Capuano said on the call. “As expected, this was [the] group’s lowest growth quarter of the year due to fewer group events in the U.S. around November’s election and a decline in group RevPAR in Greater China.”
Marriott’s Q4 results, released Tuesday, topped estimates, but shares slipped about 5% as it issued a soft outlook for room growth and profit.
:max_bytes(150000):strip_icc()/GettyImages-2166085662-7f05297812ff4d17b0367587c041c859.jpg?w=1200&resize=1200,0&ssl=1&description=Business+Travel+Is+Recovering%2C+Marriott+Says%E2%80%94Just+Not+at+the+Start+of+the+Week){kind=link}