The recovery from the COVID-19 pandemic for hotel giant Marriott appears to be gathering speed this summer.
"We just went through the fourth of July weekend, and our occupancy was through the roof. And maybe the most encouraging thing for us is we saw real pricing power," Marriott CEO Anthony Capuano told Yahoo Finance Live. In many markets, demand is back to pre-COVID levels in terms of leisure, he said.
Marriott shares rose about 1% on Wednesday.
The company's upbeat July 4 weekend looks to be in line with a quickening recovery for the industry.
Hotel industry research outfit STR said revenue per available room (RevPar) for U.S. hotels rose 5.7% from June 27 to July 3, compared to comparable 2019 levels. On this same comparison, average daily rates (ADR) increased 5.8% to $135.55.
Among the top 25 markets tracked by STR, Phoenix and Detroit saw double-digit increases in occupancy versus 2019 (14% and 13.1%, respectively). Miami notched a 35% surge in average daily rates.
What remains uncertain is the pace of business traveler demand, which is a key profit center for Marriott and the broader hotel industry. The uncertainty has continued to put pressure on shares of hotel stocks — shares of Marriott are down 6% in the past three months.
"If you look at business transient trends here in the U.S., for corporate we are at about 50% [back to pre-COVID demand levels] where we were pre-pandemic. But again, if you slice and dice the data a bit, if you look at just the secondary and tertiary markets we are closer to 80%. So what that tells you is that in the big urban markets, we are well below pre-pandemic levels," Capuano added.
Capuano — who took over as Marriott CEO earlier this year amid the sudden passing of the beloved Arne Sorenson — says this fall will be an important gauge on the state of business travel.
"That's why we are so focused on the fall, when most of the schools have reopened, kids are back in school, parents are returning to the office. That gives us some measured optimism about what business will look like in the fall," Capuano added.
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