By Priyamvada C
(Reuters) -Marriott International Inc said on Tuesday it expects an over 30% rise in its 2023 revenue per available room (RevPAR), a key measure for a hotel’s top-line performance, in China from a year ago after strict COVID-19 restrictions were lifted.
Shares of the company were up about 3% in afternoon trade.
Hotel operators were affected by uneven recovery in China as a rise in infections led to indefinite lockdowns, which in turn extended the construction timelines of some luxury properties and impeded travel to the world’s second largest economy.
Marriott, however, in January saw a surge in demand from the region during the Chinese New Year holiday, as it benefited from new open border policies and the lifting of quarantine requirements.
“We saw tremendous leisure demand associated with the Chinese New Year, but we are really pleased with the overall pace of demand that we’re seeing there,” Marriott’s finance chief Kathleen Oberg said in a conference call with analysts.
Last week, Hilton said it expects demand for stays in China to be volatile in the near term due to rising infections.
Marriott has more exposure to China than its competitor Hilton, said Bernstein analyst Richard Clarke.
“I would expect that there could be some bumps along the way but that you know by the back half of this year, I would expect that China’s probably around or close to a full recovery,” Morningstar analyst Dan Wasiolek said.
Meanwhile, the company expects its adjusted profit in the current quarter to come in between $1.82 and $1.88 per share, compared with analysts’ estimates of $1.66 per share, as per Refinitiv data.
Excluding special items, the company earned $1.96 per share, ahead of average estimates of $1.83 per share.
Its quarterly revenue rose about 33% to $5.92 billion, compared with an estimate of $5.47 billion.
(Reporting by Priyamvada C in Bengaluru and Doyinsola Oladipo in New York; Editing by Sherry Jacob-Phillips and Shailesh Kuber)
