🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Marriot shares slide on delayed opening of some properties in China

Published 11/03/2022, 06:44 AM
Updated 11/03/2022, 01:51 PM
© Reuters. FILE PHOTO: Signage for the New York Marriott Marquis is seen in Manhattan, New York, November 16, 2015. REUTERS/Andrew Kelly

By Priyamvada C

(Reuters) - Marriott International (NASDAQ:MAR) Inc said on Thursday China's strict COVID-19 policies were delaying openings of some properties in the country, a key market for hotel operators, where pandemic recovery has been uneven compared to United States.

"The market in China is most certainly where we're seeing the most challenges," Chief Executive Anthony Capuano said during an analyst call.

Shares of the Sheraton-owner fell as much as 6% in morning trade. Revenue per available room (RevPAR) from Greater China was $64.06 in 2021 company-wide, behind U.S. & Canada and Middle East & Africa.

U.S. companies have had a tough time in dealing with China's zero-COVID policy this year, with some companies such as Tesla (NASDAQ:TSLA) keeping workers isolated to keep factories running. Those involved in the real estate sector have also had to deal with a property crisis.

About 60% of Marriott's projects in the pipeline in China are in the luxury and upper upscale tier, which are significant money generators, Capuano said.

The company, however, continued to benefit from strong travel demand elsewhere despite economic headwinds, with Marriott joining its rival Hilton Worldwide Holdings (NYSE:HLT) Inc in raising its annual profit forecast on Thursday.

"Looking forward we expect that the recession will mute, but not derail, growth in the U.S. hotel industry. This may, in fact, be the first recession where GDP declines while RevPAR continues to grow," said Jan Freitag, CoStar Group (NASDAQ:CSGP)'s national director of hospitality analytics.

Marriott now expects 2022 adjusted profit per share of between $6.51 and $6.58, compared with its previous forecast of $6.33 to $6.59 per share.

For the quarter through September, Marriott posted a 36.3% rise in RevPAR at $120.60, compared to a year earlier on a constant currency basis.

Its revenues rose nearly 35% to $5.31 billion, falling slightly short of analysts' average estimate of $5.34 billion, as per Refinitiv data.

© Reuters. FILE PHOTO: Signage for the New York Marriott Marquis is seen in Manhattan, New York, November 16, 2015. REUTERS/Andrew Kelly

Adjusted profit per share was $1.69, one cent above expectations.

(This story has been refiled to say "one", not "once", in last paragraph)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.