Marriott International, Inc. (NASDAQ:MAR) Q2 2023 Earnings Call Transcript

Dori Kesten: Okay. Thank you.

Operator: Thank you. We’ll take our next question from Bill Crow with Raymond James. Please go ahead.

Bill Crow: Hey, good morning. Tony, you talked about normalization in the US. We talked about it as well. And the last, I don’t know, six weeks or so, we’ve seen RevPAR in the US plus or minus 1%, maybe up to 2%. Just curious what it is that you can look at and say, the real normalized rate might return more to 3% to 4%? What are the drivers out there to get us off this sub-inflationary growth rate?

Tony Capuano: Yes. Good question, Bill. I’d point to a few things and maybe I’ll try to answer you going segment by segment. I talked in my prepared remarks about the leisure segment being up in the quarter 10%. One of the things that was really encouraging to me in the leisure segment was that, that 10% improvement was split almost perfectly evenly by both occupancy and rate improvement. We saw a 5% improvement in ADR, which I thought was quite encouraging. Similarly — and that was a global number. Pivoting to the US, which I think was your question. In the US and Canada, we talked a little bit about group. Some of the pricing power we’re seeing in group as evidenced by the revenue pace we’re seeing, not only in the back half of 2023, where we’re pacing up 11% in revenue, but also where we’re seeing in 2024, where we’re now pacing up 14%, which is already up 5 points just three months since the last time we talked to you about group pace.

And then as you heard from Leeny, when she was asking one of the earlier questions about business transient, you have 6% ADR growth in business transient in the US and Canada, which I think is another data point. When you throw all that in the blender together, all of that gives us some comfort that there is some opportunity. The only thing, I would say to you, and you heard Leeny referenced this, we do expect year-over-year ADR to moderate a bit given some of the comparisons, particularly as we get into year three — or excuse me, Q3 and Q4 but we do expect ADR to continue to grow through the back half of the year.

Bill Crow: Yeah. That’s was it for me. Thank you.

Operator: Thank you. We’ll take our next question from Duane Pfennigwerth with Evercore ISI. Please go ahead.