By Doyinsola Oladipo and Priyamvada C
(Reuters) -Marriott International Inc raised its full-year profit forecast on Tuesday, as the U.S. hotel operator bets on higher room rates and resilient travel demand to boost its earnings.
Hotel operators have begun to reap benefits from a strong rebound in international travel as the easing of pandemic-related restrictions and a strong U.S. dollar have emboldened consumers to travel overseas.
“While conditions could change rapidly, booking trends remain solid. We are raising our full-year rooms growth and earnings guidance,” said CEO Anthony Capuano.
The company sees full-year adjusted profit of $8.36 to $8.65 per share, up from the prior forecast of between $7.97 and $8.42 per share.
Marriott’s revenue per available room, or RevPAR, an important metric in the hospitality industry, rose about 13.5% in the quarter from a year earlier.
It posted second-quarter revenue of $6.08 billion, which beat analysts’ average estimate of $5.99 billion, according to data from Refinitiv Eikon.
The hotel operator reported earnings of $2.38 per share, compared to analysts’ forecast of $2.18 per share.
Second-quarter net income rose 7% to $726 million, beating estimate of $654.6 million.
While a recession risks long-term travel spending, unabated travel demand has encouraged hotel operators to implement price hikes in the past year, enabling companies such as Marriott and Hilton to post higher profits.
Marriott’s results follow Hilton’s upbeat earnings last week, underscoring the strength in consumer spending for travel.
Marriott, which owns hotels like Sheraton, Westin and St. Regis, has seen a steady uptick in bookings, even as experts have raised concerns over a potential economic slowdown that could dent consumer spending.
(Reporting by Priyamvada C in Bengaluru; Editing by Milla Nissi)
