Marriott International, Inc. (NASDAQ: MAR) is likely to benefit from solid leisure demand, a loyalty program and unit-expansion efforts. The focus on hotel conversions bodes well. However, soft demand in China is a concern.
Let us discuss the factors that highlight why investors should retain the stock for now.
Growth Catalysts
Marriott has been gaining from pent-up leisure demand. In second-quarter 2024, the company posted RevPAR growth across all customer segments — group, leisure transient and business transient — with increases in room nights and ADR. Group business, accounting for 24% of worldwide room nights, remained the strongest segment, with group RevPAR up 10% year over year.
The company witnessed robust demand during second-quarter 2024. The company's net rooms grew 6% year over year. In comparison, global RevPAR increased nearly 5%, supported by a 3% rise in the average daily rate and an occupancy increase of approximately 150 basis points, reaching 73%.
MAR's global RevPAR index continues to rise, reflecting its strong position in the market. RevPAR in the United States and Canada saw a nearly 4% gain, aided by the shift of the Easter holiday, with all chain scales from select service to luxury reporting positive growth. Internationally, RevPAR rose more than 7%, led by a 13% increase in Asia Pacific (excluding China). The upside was backed by robust macro trends and increased cross-border travel, particularly from Mainland China. Japan, in particular, saw a 21% rise in RevPAR. The EMEA region reported nearly 10% growth, while CALA posted a 9% increase. The company expects global RevPAR to rise 3-4% year over year in the second quarter and full year in 2024.
The company ...
