Hotel operator Marriott International forecast 2024 profit below Wall Street expectations on Tuesday as US room revenue decelerates from post-pandemic highs.
Travel demand and costs in the United States have been returning to normal levels after a post-COVID spike driven by 'revenge travel.'
International Markets
Meanwhile, travel companies are expecting their 2024 boost to come from China, the final region lagging in recovery from the pandemic.
"Growth is expected to remain higher in international markets than in the US and Canada, with particular strength in Asia-Pacific," chief financial officer Kathleen Oberg said on a call with investors.
Marriott expects revenue per available room, a closely watched industry metric for hotels' top-line performance, to increase between 3% and 5% this year. This compares to 14.9% growth in 2023.
Rivals
The company's shares were down 5.3% in early trading. Shares of rivals Hilton Worldwide and Hyatt Hotels fell 3% and 4%, respectively.
Marriott forecast a full-year profit of $9.18 to $9.52 per share, while analysts had expected $9.69 per share, LSEG data showed.
"The generally solid report and guide is likely not enough to push the shares higher based on the strong performance of the past few months," Jefferies analyst David Katz said in a note.
Higher Room Rates
Revenue per available room rose 7.2% in the fourth quarter, boosted by higher room rates and occupancy levels in China.
Barclays analyst Brandt Montour noted Marriott appears to have stopped giving room revenue guidance for North America.
"The US is largely expected to underperform the broader globe this year," Montour said in a note.
Tax Benefit
Marriott posted adjusted fourth-quarter earnings of $3.57 per share, beating analysts' forecast of $2.12 per share. Adjusted net income of $1.05 billion (€976 million) also surpassed expectations, largely due to a one-time tax benefit.
The Ritz-Carlton owner's quarterly revenue reached $6.1 billion (€5.6 billion), roughly in line with estimates.
Development Projects
Net room growth is expected to increase by 5.5% to 6% in 2024, as paused development projects in China resume construction, Marriott said.
Shares of vacation rental company Airbnb, which will report its earnings later on Tuesday, fell 2%.
