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Marriott International (MAR) Banks on Robust Demand & Expansion

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Marriott International, Inc. (MAR - Free Report) has been riding on solid demand and its expansion plans. Also, strategic acquisitions and digital innovations bode well.

Recently, MAR reported impressive first-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate by 12.4% and 6.4%, respectively. Also, the top and the bottom line increased year over year by 33.7% and 67.2%, respectively. The upside was backed by robust demand across all the customer segment.

Shares of MAR have increased 15.3% in the year-to-date period compared with the Zacks Hotels and Motels industry’s rise of 8.9%. Earnings estimates for 2023 have moved north to $8.39 per share from $7.77 per share in the past 30 days. This depicts analysts' optimism over the company’s growth prospects.

Zacks Investment Research
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Growth Drivers

The company witnessed robust demand during first-quarter 2023 in the United States, Canada and Asia Pacific region. The company benefited from robust leisure demand and ADR, while business transient demand continued to improve. In the first quarter, global demand for hotels increased significantly across all regions. In the United States and Canada, RevPAR increased by 26%, with occupancy reaching 66% and ADR rising by 10% compared with last year’s levels. Internationally, RevPAR increased an impressive 63%, with ADR increasing by 16% and occupancy improving by 18 percentage points. The Asia Pacific region experienced particularly strong demand after travel restrictions were lifted.

Marriott is consistently trying to expand its presence worldwide and capitalize on the demand for hotels in international markets. During first-quarter 2023, the company added 79 new properties (11,015 rooms) to its worldwide lodging portfolio. At the end of first-quarter 2023, Marriott's development pipeline totaled 3,060 hotels, with approximately 502,000 rooms. Nearly 200,000 rooms were under construction.

Marriott completed the acquisition of the City Express as its 31st brand, expanding the portfolio into the midscale sector. The addition of 152 properties (approximately 17,000 rooms) propelled the company to become the largest hotel company in the Caribbean & Latin America region. The growing demand for mid-scale accommodations presents promising opportunities to expand the brand in CALA and explore new regions.

The company is actively utilizing its digital platforms to engage with customers, which have proven to be highly profitable for stakeholders. During the first quarter, the company witnessed record-breaking performance in digital channels, with a 31% increase in mobile app users, a 17% rise in digital room nights and a 26% increase in digital revenues compared with the prior-year quarter’s levels.

The company recently entered into an industry-first agreement with the multilatina technology company, Rappi, Inc., to enhance everyday earning and provide a superior travel experience for Marriott Bonvoy members and Rappi users. Through the collaboration with Rappi, Marriott aims to expand its reach and services to Rappi's extensive user base of over 30 million across nine Latin American countries, including Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Peru and Uruguay. This partnership showcases Marriott's commitment to innovative and tech-forward collaborations that meet the evolving needs of its guests, solidifying its presence in the region.

Zacks Rank & Other Key Picks

Marriott International, Inc. currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks from the Zacks Consumer Discretionary sector are:
Royal Caribbean Cruises Ltd. (RCL - Free Report) carries a Zacks Rank #1. RCL has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have gained 36.1 in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates a rise of 48.3% and 160.5%, respectively, from the year-ago period’s levels. Group Limited (TCOM - Free Report) carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 153.1%, on average. Shares of TCOM have increased 42.7% in the past year.

The Zacks Consensus Estimate for TCOM’s 2023 sales and EPS indicates a rise of 76.9% and 334.5%, respectively, from the year-ago period’s levels.

Bluegreen Vacations Holding Corporation (BVH - Free Report) carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 24.7%, on average. Shares of BVH have increased 8.7% in the past year.

The Zacks Consensus Estimate for BVH’s 2023 sales and EPS indicates a rise of 3.6% and 17.6%, respectively, from the year-ago period’s levels.

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