Not unlike a hotel guest holding a plastic bucket up to a 40-year-old ice machine, Marriott executives looking at growth forecasts are expecting to get less than they’d like.
A weaker Chinese economy and a slowdown in North American bookings caused the world’s largest hotel chain to lower its full-year outlook for revenue per available room (RevPAR), the company said Wednesday in its second-quarter earnings release. Marriott is now expecting that all-important industry metric to grow 3%–4% through 2024, instead of 3%–5%. Disappointed investors pushed Marriott’s stock down nearly 5% from Tuesday’s close to Wednesday’s.
Marriott is far from alone in taking a hit from lower spending in China. Analysts believe demand from China will remain depressed “while a protracted property downturn and job insecurity weigh on consumers,” Reuters reported. About one in 10 of Marriott’s hotel rooms are in greater China, and the company continues to build its presence there. CEO Tony Capuano told analysts that the company had “record signings” there and in the Asia Pacific region in the first half of the year.
Jet-setters. In the US, Americans wanting to get mileage out of their passports is part of the reason for the “marginally softer expectations” Marriott described in North America, with “more tourists choos[ing] to travel internationally to destinations in Asia, Latin America and Europe,” according to Reuters.
News built for finance pros
CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.