Gaining Momentum
By Dennis Nessler | May 12, 2022
Earlier this week Choice Hotels International became the latest major brand company to report its 1Q results for 2022 and the Rockville, MD-based franchisor outpaced all of its competitors in terms of RevPAR performance with results exceeding 2019 by more than 10 percent.
Hilton and Marriott International, meanwhile, both saw improvement over last year in terms of global results and are projecting a continued recovery and improved results going forward.
Patrick Pacious, President and CEO, Choice Hotels, commented on the results.
“Building on the record year we had in 2021, where we surpassed 2019 RevPAR and profitability levels, Choice Hotels’ proven business model once again delivered impressive quarterly results, and we expect this momentum to continue as we approach the summer leisure travel season,” he stated.
For Choice, domestic systemwide revenue per available room (RevPAR) growth increased by 10.4% for first quarter 2022, compared to the same period of 2019, and outperformed the total industry by 13 percentage points. RevPAR growth was driven by an increase in average daily rate (ADR) of 9.3% and a 60-basis-point increase in occupancy levels versus first quarter 2019.
In addition, domestic systemwide RevPAR growth has surpassed 2019 levels for 10 consecutive months through March 31, 2022, a trend that has continued in the second quarter of 2022 with April RevPAR increasing approximately 16%, compared to April of 2019. RevPAR for full-year 2022 is expected to increase between 10% and 13%, compared to full-year 2019.
Applications received for new domestic franchise agreements increased by 46% in first quarter 2022, compared to the same period of 2021.
For the three months ended March 31, 2022, Hilton’s system-wide comparable RevPAR increased 80.5 percent compared to the same period in 2021, due to increases in both occupancy and ADR, and fee revenues increased 79 percent compared to the same period in 2021.
For comparison to pre-pandemic results, system-wide comparable RevPAR for the three months ended March 31, 2022 was down 17.0 percent compared to the three months ended March 31, 2019. For the three months ended March 31, 2022, diluted EPS was $0.75 and diluted EPS, adjusted for special items, was $0.71 compared to $(0.39) and $0.02, respectively, for the three months ended March 31, 2021.
Net income (loss) and Adjusted EBITDA were $211 million and $448 million, respectively, for the three months ended March 31, 2022, compared to $(109) million and $198 million, respectively, for the three months ended March 31, 2021.
Christopher J. Nassetta, President & Chief Executive Officer of Hilton, stated, “We are happy to report solid first-quarter results, with all segments driving better than expected top line performance in March. Our results in the quarter, coupled with our confidence in continued recovery throughout the year, enabled us to begin returning capital to shareholders earlier than we had anticipated.”
Marriott International, meanwhile, reported that 1Q 2022 comparable systemwide constant dollar RevPAR increased 96.5 percent worldwide, 99.1 percent in the U.S. & Canada, and 88.5 percent in international markets, compared to the 2021 first quarter. In addition, first quarter 2022 comparable systemwide constant dollar RevPAR declined 19.4 percent worldwide, 14.5 percent in the U.S. & Canada, and 31.7 percent in international markets, compared to the 2019 first quarter;
Anthony Capuano, CEO, Marriott International, stated, “During the first quarter, we saw the largest surge in global demand since the pandemic began in 2020. Worldwide occupancy rose dramatically from 45 percent in January, impacted by the Omicron variant, to 64 percent in March, less than 10 percentage points below pre‐pandemic levels. Rates further strengthened, with worldwide Average Daily Rate for March exceeding the same month in 2019 by 5 percent.
“In the U.S. & Canada, RevPAR improved significantly in February and March, particularly across our urban markets, driven by occupancy and rate gains across all customer segments. Internationally, RevPAR gains were notable during the quarter in every region except for Greater China given the stringent travel restrictions resulting from the country’s dynamic zero‐ COVID policy. The Middle East and Africa region was again the furthest recovered, with first quarter RevPAR up 12 percent compared to 2019.”
