‘Live With COVID’ Policy Around the World Accelerates Recovery

Strengthening demand for both leisure and business travel, as well as the ability to drive rates, increased revenue in Marriott International’s hotels achieves per available room just 9% below 2019 levels worldwide in the first quarter.

Speaking during the global hotel brand company’s first quarter 2022 earnings call, Marriott CEO Tony Capuano said global demand rebounded swiftly after a brief COVID-19-related slowdown early in the quarter. Occupancy reached 64% in March, and average daily rate was 5% above March 2019.

COVID-19 is still affecting Marriott’s business to varying degrees around the world, but increasing vaccination rates, falling case numbers and less severe variants have led countries to cautiously adopt a “live with COVID” policy, and that has caused in a rise in demand for travel, he said.

Leisure travel demand, which fully recovered in 2021, further room nights in the first quarter with more than 10% above 2019 levels, Capuano said. The recovery of business transient and group demand still lags, but is rapidly improving as more employees return to the office.

Day-of-the-week trends continue to show that trips that blend leisure and business are on the rise, he said. In March in the US and Canada, hotel occupancy was down in the mid-teens Monday through Wednesday, and to single-digit percentages during the shoulder days of Thursday and Sunday, but occupancy on Fridays and Saturdays was nearly in line with March 2019.

Cross-border guests accounts for 14% of global room nights in the first quarter, a gain of about 100 basis points compared to the previous quarter but below 2019’s share of 19%.

The first quarter marked Marriott’s best quarter for direct digital bookings, which were up 14% compared to the first quarter of 2019, Capuano said.


March RevPAR in the US and Canada was within 4% of 2019 levels, Capuano said. Occupancy topped 68% in March and ADR was 6% over pre-pandemic levels.

“While the extent of RevPAR recovery is still widely from city to city, overall progress during the quarter was widespread,” he said. “Across all chain scales as well as market types — that is primary, secondary and tertiary markets — RevPAR recovery saw meaningful improvement in March versus the fourth quarter.”

The luxury segment was the standout in the first quarter with ADR 27% above pre-pandemic levels, he said. Group demand grew sharply in the quarter, resulting in group RevPAR 16% below March 2019 levels, an improvement from being down 30% in the fourth quarter of 2021.

Group bookings are on pace for a meaningful improvement through the remainder of 2022, Capuano said. By the end of the first quarter, group revenue pace for the year was down in the high single-digit range compared to 2019.

“We also expect additional short-term bookings to further boost group revenues,” he said. “April was the eighth month in a row where in-the-year, for-the-year group bookings exceeded 2019 levels.”

Business transient demand in the US also gained momentum, Capuano said. Business transient room nights were down 10% to 15% in the quarter compared to 2021, which marked a sequential improvement from the previous quarter. Bookings from special corporate accounts have recovered slower than those from smaller-sized businesses, but special corporate new bookings strengthens in March and further advanced in April.

Internationally, Marriott made gains in RevPAR recovery in every region except Greater China, Capuano said. In the Middle East and Africa, RevPAR surpassed 2019 for the second straight quarter, led by strength in the United Arab Emirates with the World Expo in Dubai that ran for several months.

In Greater China, RevPAR dropped significantly with the lockdown of several major cities, including Shanghai late in the quarter, he said.

Marriott is keeping a close eye on trends in Europe, Capuano said. Outside of Russia, the war in Ukraine has not affected demand yet and cancellations have been minimal. As all countries in the region have removed or reduced travel restrictions, bookings in Europe have accelerated for the spring and summer travel seasons.

The company has closed its corporate offices in Russia and paused all future hotel development and new openings, he said. There are currently 23 properties open in the country, and occupancies are modest. Marriott continues to evaluate its operations in Russia, which represents less than 1% of its global fees, he said.

“We are watching the horrific humanitarian crisis in Ukraine and neighboring countries with deep concern, and we’re doing what we can to help those affected in the region,” he said. “I’m very proud of our teams that have been mobilizing to help those in need in numerous ways, including working with relief partners and housing refugees at Marriott properties in neighboring countries.”


Marriott added approximately 11,800 rooms globally during the first quarter, according to the earnings release. That includes approximately 5,300 rooms in international markets and more than 2,500 conversion rooms.

By the end of the quarter, the company’s worldwide development pipeline totaled nearly 2,900 properties with more than 489,000 rooms. That includes approximately 20,800 rooms approved but not yet subject to signed contracts. Approximately 201,400 rooms in the pipeline were under construction as of the end of the quarter.

Marriott’s development pipeline continues to grow each month, Capuano said. The company signed 124 deals globally through March, a new first quarter record.

“Despite construction timelines having lengthened a bit so far this year due to supply chain disruptions and labor shortages, we expect openings to ramp up each quarter in 2022,” he said.

The average construction timeline for limited-service properties is slightly more than two years, and the timeline for full-service hotels is longer, he said. Over the next four years, Marriott expects gross rooms growth to approach 5% with deletions of 1% to 1.5%, resulting in net rooms growth of 3.5% to 4%.

Financing has started to ease, new-construction starts have ramped up in the industry during the quarter, Capuano said, noting that though those numbers are still below 2019 levels, the company is confident that it will return to pre-pandemic levels of mid- single-digit net rooms growth over the next several years.


Marriott’s first quarter comparable systemwide constant dollar RevPAR grew by 96.5% worldwide compared to the first quarter of 2021, according to the earnings release. That breaks down to 99.1% in the US and Canada and 88.5% in international markets.

Compared to the first quarter of 2019, comparable systemwide constant-dollar RevPAR was down 19.4% worldwide. It was down 14.5% in the US and Canada and 31.7% in international markets.

Marriott reported net income of $377 million, an improvement from the net loss of $11 million in the first quarter of 2021. It reported total revenue of almost $4.2 billion, an 81% year-over-year increase. Adjusted earnings before interest, taxes, depreciation and amortization totaled $759 million compared to $296 million in the first quarter of 2021.

By the end of the quarter, Marriott’s net debt was $8.5 billion, which represents a total debt of $9.5 billion less cash and cash equivalents of $1 billion. By the end of 2021, its net debt was $8.7 billion, with total debt of $10.1 billion less cash and cash equivalents of $1.4 billion.

As of press time, Marriott’s stock was trading at $177.64, up 8.4% year to date. The NASDAQ Composite Index was down 21.4% for the same period.

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