Marriott Reports Total U.S. Occupancy of 63% in June 2021

During Marriott’s Q2 2021 earnings conference call, CEO Anthony Capuano said that Marriott saw “tremendous overall improvement in both occupancy and rate” during Q2 2021. For example, worldwide occupancy gained six percentage points in the month of June 2021 vs. May 2021 to top out at 55 percent. Plus, ADR was down “only 13% from June two years ago. As a result, global RevPAR has risen meaningfully and swiftly from the depths of the pandemic when RevPAR was down 90% to down just 38% in June compared to the same month in 2019.”

When looking at the USA in particular, leisure room nights in Q2 were up 15% higher than in Q2 2019. Total US occupancy reached over 63% in June 2021 with ADR down 11% versus June 2019.

“Our strong momentum has continued into the first 3.5 weeks of July,” Capuano added. “With US occupancy reaching 67% and ADR down only 2% compared to July of '19. July RevPAR for this period was down around 16% versus July of 2019.”

The Return of Event Bookings

In addition to leisure demand returning, corporate and group demand is also showing signs of recovery. Special corporate booking levels during the first three-and-a-half weeks of July are down approximately 45% compared to the same period in 2019, Capuano says the company is “optimistic we’ve turned a corner.” This is likely due to the fact that U.S. special corporate bookings rose 23% in June 2021 compared to May 2021 and then rose another 27% during the first three-and-a-half weeks of July.

“Many of our corporate customers are telling us they are beginning to get back on the road this summer, and we expect to see a step-up in business travel post Labor Day as children go back to in-person learning and workers increasingly return to the office,” Capuano adds.

Marriott’s US group bookings have also gained momentum. U.S. group bookings made for all future dates were down 29% in June compared to those made in June of 2019, “a large improvement from down 56% in March of 2021 versus March of 2019. And for the first time since the pandemic started, group bookings made in the month of June or any time in 2021 exceeded in-the-year bookings made in the same month of 2019.”

At the end of the second quarter, Capuano said group revenue pace versus 2019 was down 31% for the fourth quarter of this year, improving to down 21% for the first quarter of 2022 and then down 12% for the second quarter of 2022.

“However, it's still early, and we expect bookings made closer to the event date will increase group revenue on the books for these time periods,” he added. “Most importantly, our sales team is holding on to average daily rate. ADR for group bookings is almost flat for the fourth quarter and 3% higher for full year 2022 compared to the same periods in 2019.”

Bonvoy Members Enjoy HVMI, Uber

Bonvoy penetration continues to recover, Capuano explained with Q2 2021 seeing it at 49.5%.

“That was a significant increase. We went as low as about 43% at the bottom of the pandemic, but it is still a couple of points shy of where we were pre-pandemic at about 52%,” Capuano added. “But the pace of penetration recovery, I think, is quite encouraging.”

Marriott also shared a few examples of it has been engaging with loyalty members in meaningful ways. For instance, its Homes & Villas by Marriott International (HVMI) brand currently has approximately 35,000 whole-home listings and has been “an attractive offering and tool for engaging with members throughout the pandemic,” said Capuano.

To begin with, more than 90% of HVMI room nights in Q2 2021 were booked by Bonvoy members. This is especially encouraging as nearly 40% of HVMI listings are in markets where Marriott does not have distribution, meaning HVMI is expanding the number of destination options for Marriott customers.

Bonvoy members also seem to be interested in taking advantage of the recent Marriott/Uber partnership that provides members with Bonvoy points for both UberEats delivery and Uber rides.

“The number of members linking their accounts to date has far exceeded our expectations,” Capuano added. “Activated accounts were already averaging six transactions in just the first 10 weeks, demonstrating our ability to drive real engagement with our Marriott Bonvoy members beyond the hotel beyond the hotel stay.

Housekeeping and Staffing

Marriott specifically said it was facing labor challenges in U.S. markets where demand has rebounded quickly. Capuano specifically called out Southern Florida, Texas and Arizona. To try and recruit more staff members, the company is increasing its social targeted marketing of Marriott as a best employer with career advancement opportunities along with more traditional outreach such as job fairs.

“Hiring tools, including onetime sign-on bonuses and temporary incentives, sometimes in combination with base salary adjustments in select markets, are also being successfully employed,” Capuano added.

When asked about housekeeping, Capuano said the brand would continue to “evaluate and evolve” its housekeeping service based on guest request. He noted that some guests are hesitant about having housekeepers in their room and appreciate being given the option to refuse that service while others want more of a conventional housekeeping solution. He added that the brand is working hard to “strike the right balance between the expectations of our guests and the financial realities our owners and franchisees face.”