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Marriott (MAR) Rides on Improving Demand & Expansion Efforts
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Marriott International, Inc. (MAR - Free Report) is benefiting from improved demand in the Middle East and Africa, the Caribbean and Latin America and Europe, expansion initiatives and a robust loyalty program. In the past three months, the company’s shares have gained 7.1%, compared with the industry’s rally of 4.9%. However, resurgence in coronavirus cases in several parts of the world might hurt the company’s performance. Although RevPAR is improving sequentially, it is still below the pre-pandemic level. Let’s delve deeper.
Growth Drivers
The company witnessed steady increase in demand throughout third-quarter 2021. Although the Delta variant had negatively impacted business transient demand (during the second half of the quarter), demand is stated to have picked up in October. The company reported resurgence of lodging demand in Mainland China with leisure, business transient and group room bookings ahead of 2019 levels. Also, solid leisure demand was reported in the United States and Canada region.
During the quarter, the company witnessed improved demand in the Middle East and Africa, the Caribbean and Latin America and Europe. The company has been gaining from the reopening of the international borders and leniency in travel restrictions. Marriott announced that several of its urban destinations witnessed record high ADRs, up 32% from 2019 levels. The upside was primarily driven by improvements in business transient and group demand along with solid leisure demand. With global trends improving, the company anticipates the recovery momentum to continue in the upcoming periods as well.
The Zacks Rank #3 (Hold) company is consistently trying to expand its presence worldwide and capitalize on the demand for hotels in international markets. Moving ahead, it plans to significantly expand global portfolio of luxury and lifestyle brands. At the end of third-quarter 2021, Marriott's development pipeline totaled nearly 2,769 hotels, with approximately 477,000 rooms. Nearly 206,000 rooms were under construction. During third-quarter 2021, the company added 114 new properties (17,456 rooms) to its worldwide lodging portfolio. In 2021, Marriott anticipates net rooms growth to be approximately 3.5%. The hotel company is trying to strengthen its presence outside the United States, especially in Asia, Latin America, Middle East and Africa. Meanwhile, the company’s European pipeline has grown consistently in the recent past and is expected to continue going forward.
With nearly 157 million members globally, the company’s loyalty program Marriott Bonvoy plays a crucial role in supporting its marketing strategies. The company is focusing on non-hotel stay experiences such as Eat Around Town and Homes and Villas by Marriott International. Despite having an immaterial impact on the company’s financials, the initiative allows Bonvoy members to earn and redeem points through its 30,000 listings.
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Concerns
The coronavirus pandemic continues to hurt RevPAR and occupancy rates. During third-quarter 2021, revenue per available room (RevPAR) for worldwide comparable system-wide properties fell 25.8% (in constant dollars) compared with 2019 levels. The decline was primarily due to a fall in occupancy and ADR. Occupancy and ADR declined 16.8% and 4.4%, respectively, from 2019 levels. These metrics were impacted by the coronavirus pandemic. Comparable system-wide RevPAR in Asia Pacific (excluding China) fell 63.9% (in constant dollars) from 2019 levels. Occupancy and ADR declined 37.9% and 26%, respectively, from 2019 levels. Comparable system-wide RevPAR in Greater China fell 27.4% from 2019 levels. On a constant-dollar basis, international comparable system-wide RevPAR slumped 40.7% compared with 2019 levels. Occupancy and ADR dropped 25.4% and 7.9%, respectively, from 2019 levels. Comparable system-wide RevPAR in Europe as well as Caribbean & Latin America decreased 43.5% and 17.8%, respectively, from 2019 levels.
Margin contraction remains a major concern. Hotel margins have been impacted by sharp decline in revenues due to the pandemic. During the third quarter, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $683 million compared with $327 million in the prior-year quarter.
3 Key Picks
Some better-ranked stocks in the Consumer Discretionary sector include Hilton Grand Vacations Inc. (HGV - Free Report) , Bluegreen Vacations Holding Corporation and Camping World Holdings, Inc. (CWH - Free Report) .
Hilton Grand Vacations sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 411.1%, on average. Shares of the company have jumped 44.6% so far this year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hilton Grand Vacations’ current financial year sales and earnings per share (EPS) suggests growth of 222.1% and 170.8%, respectively, from the year-ago period’s levels.
Bluegreen Vacations flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 695%, on average. Shares of the company have soared 115.4% so far this year.
The Zacks Consensus Estimate for Bluegreen Vacations’ current financial-year sales and EPS indicates growth of 27.5% and 199.3%, respectively, from the year-ago period’s levels.
Camping World carries a Zacks Rank #2 (Buy). The company has been benefiting from the launch of a fresh peer-to-peer RV rental marketplace and a mobile service marketplace. It has been investing heavily in product development.
Camping World has a trailing four-quarter earnings surprise of 70.9%, on average. Shares of the company have appreciated 64.6% so far this year. The Zacks Consensus Estimate for CWH’s financial-year sales and EPS suggests growth of 25.9% and 77.1%, respectively, from the year-ago period’s levels.
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Marriott (MAR) Rides on Improving Demand & Expansion Efforts
Marriott International, Inc. (MAR - Free Report) is benefiting from improved demand in the Middle East and Africa, the Caribbean and Latin America and Europe, expansion initiatives and a robust loyalty program. In the past three months, the company’s shares have gained 7.1%, compared with the industry’s rally of 4.9%. However, resurgence in coronavirus cases in several parts of the world might hurt the company’s performance. Although RevPAR is improving sequentially, it is still below the pre-pandemic level. Let’s delve deeper.
Growth Drivers
The company witnessed steady increase in demand throughout third-quarter 2021. Although the Delta variant had negatively impacted business transient demand (during the second half of the quarter), demand is stated to have picked up in October. The company reported resurgence of lodging demand in Mainland China with leisure, business transient and group room bookings ahead of 2019 levels. Also, solid leisure demand was reported in the United States and Canada region.
During the quarter, the company witnessed improved demand in the Middle East and Africa, the Caribbean and Latin America and Europe. The company has been gaining from the reopening of the international borders and leniency in travel restrictions. Marriott announced that several of its urban destinations witnessed record high ADRs, up 32% from 2019 levels. The upside was primarily driven by improvements in business transient and group demand along with solid leisure demand. With global trends improving, the company anticipates the recovery momentum to continue in the upcoming periods as well.
The Zacks Rank #3 (Hold) company is consistently trying to expand its presence worldwide and capitalize on the demand for hotels in international markets. Moving ahead, it plans to significantly expand global portfolio of luxury and lifestyle brands. At the end of third-quarter 2021, Marriott's development pipeline totaled nearly 2,769 hotels, with approximately 477,000 rooms. Nearly 206,000 rooms were under construction. During third-quarter 2021, the company added 114 new properties (17,456 rooms) to its worldwide lodging portfolio. In 2021, Marriott anticipates net rooms growth to be approximately 3.5%. The hotel company is trying to strengthen its presence outside the United States, especially in Asia, Latin America, Middle East and Africa. Meanwhile, the company’s European pipeline has grown consistently in the recent past and is expected to continue going forward.
With nearly 157 million members globally, the company’s loyalty program Marriott Bonvoy plays a crucial role in supporting its marketing strategies. The company is focusing on non-hotel stay experiences such as Eat Around Town and Homes and Villas by Marriott International. Despite having an immaterial impact on the company’s financials, the initiative allows Bonvoy members to earn and redeem points through its 30,000 listings.
Concerns
The coronavirus pandemic continues to hurt RevPAR and occupancy rates. During third-quarter 2021, revenue per available room (RevPAR) for worldwide comparable system-wide properties fell 25.8% (in constant dollars) compared with 2019 levels. The decline was primarily due to a fall in occupancy and ADR. Occupancy and ADR declined 16.8% and 4.4%, respectively, from 2019 levels. These metrics were impacted by the coronavirus pandemic. Comparable system-wide RevPAR in Asia Pacific (excluding China) fell 63.9% (in constant dollars) from 2019 levels. Occupancy and ADR declined 37.9% and 26%, respectively, from 2019 levels. Comparable system-wide RevPAR in Greater China fell 27.4% from 2019 levels. On a constant-dollar basis, international comparable system-wide RevPAR slumped 40.7% compared with 2019 levels. Occupancy and ADR dropped 25.4% and 7.9%, respectively, from 2019 levels. Comparable system-wide RevPAR in Europe as well as Caribbean & Latin America decreased 43.5% and 17.8%, respectively, from 2019 levels.
Margin contraction remains a major concern. Hotel margins have been impacted by sharp decline in revenues due to the pandemic. During the third quarter, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $683 million compared with $327 million in the prior-year quarter.
3 Key Picks
Some better-ranked stocks in the Consumer Discretionary sector include Hilton Grand Vacations Inc. (HGV - Free Report) , Bluegreen Vacations Holding Corporation and Camping World Holdings, Inc. (CWH - Free Report) .
Hilton Grand Vacations sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 411.1%, on average. Shares of the company have jumped 44.6% so far this year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hilton Grand Vacations’ current financial year sales and earnings per share (EPS) suggests growth of 222.1% and 170.8%, respectively, from the year-ago period’s levels.
Bluegreen Vacations flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 695%, on average. Shares of the company have soared 115.4% so far this year.
The Zacks Consensus Estimate for Bluegreen Vacations’ current financial-year sales and EPS indicates growth of 27.5% and 199.3%, respectively, from the year-ago period’s levels.
Camping World carries a Zacks Rank #2 (Buy). The company has been benefiting from the launch of a fresh peer-to-peer RV rental marketplace and a mobile service marketplace. It has been investing heavily in product development.
Camping World has a trailing four-quarter earnings surprise of 70.9%, on average. Shares of the company have appreciated 64.6% so far this year. The Zacks Consensus Estimate for CWH’s financial-year sales and EPS suggests growth of 25.9% and 77.1%, respectively, from the year-ago period’s levels.