If Accor can go from billion-dollar losses to profitability in a matter of months, Marriott shareholders should expect plenty of financial gains and optimism on Tuesday's earnings call.
The world’s largest hotel company is likely to beat its financial chest this week with boasts of profitability and growth.
Each of the three major hotel companies to report earnings last week posted a profit, an impressive feat considering Accor lost roughly $2 billion last year. Companies like Marriott, Hyatt, Choice Hotels, and MGM Resorts International are up this week — but Marriott will be a major indicator of how the broader hotel industry is performing given its 30 brands across a variety of price points.
Don’t expect any summer doldrums.
“The pent-up demand and the strength of the economy clearly shows that consumers love to travel and they love to come stay at our hotels,” Leeny Oberg, Marriott’s chief financial officer, told reporters last week at the Americas Lodging Investment Summit. “We thought the momentum in [the second quarter] was just really impressive.”
Oberg and other executives didn’t provide financial specifics in light of the quiet period leading up to this week’s earnings call. But she did point to STR data that showed revenue per available room — the industry’s key performance metric — rising sharply over the last three months. The more than 71 percent average occupancy last week in the U.S. was the highest rate seen since October of 2019, STR reported.
That should give a major clue to expect a financial victory for Marriott this week. Hilton’s $128 million second quarter profit was the first time the company was in the black since the beginning of the pandemic.
Marriott was able to notch a $100 million profit in the third quarter of last year due in part to its significant cost savings plans. A profit this week would largely stem from the company’s leisure growth, which Oberg said was underway even before the pandemic.