Hilton and Marriott’s statistics are looking up after revenue per available room (RevPAR) met or exceeded 2019 levels. Hilton CEO Chris Nassetta attributes the growth of business travel, as “bookings for company meetings strengthened each month of the quarter.” Marriott CEO Tony Capuano notes the continued demand for leisure travel as the source of improved earnings in Q2.
Both forms of travel recovering bodes well for meeting professionals who are eager to attend events before taking a few extra days alone.
Business and Bleisure Soaring
Hilton’s Nassetta said in the second quarter earnings call that big corporate companies are driving recovering business travel. Though groups are slightly behind business and leisure, group travel at Hilton has returned to 85% of 2019 levels. Nassetta also expects leisure to stay strong through fall, bolstered by the trend of bleisure guests lengthening their trips after a meeting or event.
At the same time, Marriott’s Capuano reports an improvement in group travel from Q1 in the United States and Canada. RevPAR in Q2 was only down 1% from 2019 levels, compared to it being down 20% from 2019 in Q1. Capuano says that small and medium businesses are driving the group and business recovery. Meeting planners have asked Marriott to accommodate bleisure travel by making it easy for event attendees to extend their stays. Capuano says this request is, “another confirmation that blended trips will likely endure well beyond the end of the pandemic.”
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Rising Numbers All Around
Across the Hilton system, Q2 greatly benefited from the pent-up need to travel. Overall, the company saw:
- RevPAR improved by 54.3% from last year to $109.62
- Occupancy at 70.8%, an increase of more than 12 percentage points
- The average daily rate increased by 27.5% to $154.92
- Net income was $367 million, up dramatically from $128 million in 2021 during the same period
Marriott saw a similar system-wide boom this quarter:
- RevPAR increased 70.6% to $119.37
- Occupancy improved by 16.7 percentage points to 67.8%
- The average daily rate was up 28.6% to $175.99
- Net income was $678 million, up from $422 million in Q2 of 2021
Leisure Going Strong
Hilton’s weekend RevPAR showed the strength of an international desire to get back to travel. Systemwide, it was 14% above 2019 Q2 weekend levels. Nassetta isn’t concerned about economic strain affecting travel habits any time soon. He says that Hilton Honors members, who make up a large portion of the company’s revenues, are less likely to change their spending habits in the short term. “We haven’t really seen any real cracks in the armor in terms of their spending pattern,” he said of higher-end Honors members.
Capuano had less to say about leisure travel, but Marriott credits leisure demand with raising Q2’s revenue to $5.3 billion, 69.5% more than last year’s Q2.
Europe is doing incredibly well for both companies. Nassetta was surprised by the region’s performance—it’s currently trending above 2019 levels and expected to stay strong into Q3. Marriott CFO Leeny Oberg also noted Europe’s strength, saying it had “the swiftest RevPAR recovery of all of our regions this year.” Like Hilton, Marriott’s RevPAR went above 2019 levels this summer.
Meanwhile in the Asia Pacific region, travel is falling as a result of China’s strict Covid guidelines. Hilton reported recovery trends as being “way behind.” Marriott’s Oberg said that lockdowns in major Chinese cities like Shanghai and Beijing have driven down the RevPAR in Greater China by more than 50% compared to 2019 levels.
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