Strong pent-up spending, domestic travel help Marriott see recovery in 2022

By TIN Media | Hospitality Published 2 weeks ago on 19 September 2022
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MALAYSIA:

Travellers  flocking to Marriott International-run resorts and hotels in Malaysia are contributing to the group’s stronger-than-expected performance post-Covid-19 as it aggressively expands its portfolio in the country. Marrriott has already confirmed 26 management contracts for hotel openings through 2030.

“In 2022, we are looking at an 80% RevPAR (revenue per available room) recovery [for Malaysia] since borders are reopening. We think we can reach the 2019 [level] as a market this October,” Rivero Delgado Ramos, Marriott International area vice-president for Singapore, Malaysia and Maldives, tells The Edge in an interview, noting strong domestic demand.

“Travellers favour strategically located hotels and are willing to spend more on rooms and food and beverage.”

The expected operating numbers for Malaysia are decent relative to global performance for the operator of brands such as The Ritz-Carlton, St Regis, JW Marriott, W, Sheraton and the Westin.

Marriott International Inc, whose second-quarter earnings topped Wall Street estimates on Aug 2, had said RevPAR increased 70.6% worldwide, 61.1% in the US and Canada and 87.8% in international markets compared with the same period the year before. It had also guided third-quarter earnings to be better than the second quarter’s. Marriott CEO Anthony Capuano had reportedly told investors that “the shift of spending towards experiences versus goods, sustained high levels of employment and the lifting of travel restrictions and opening of borders in most markets around the world are fuelling travel”.

An increase in RevPAR generally means either the average room rate or occupancy rate is increasing, or both.

What’s more, the better operating numbers come even though flights are not yet operating at full capacity. “International flight accessibility is still around 44%; we are far behind the [capacity] levels of 2019,” Delgado points out. “Despite not having full flight capacity, business demand is coming back very strong. Guests are looking forward to returning to our hotels and spending time with us.”

Already, Marriott group resorts are seeing guest spend per room per day “heavily increased”. Delgado says that not only has the volume of domestic tourists risen, they are also spending more. “It’s a lifestyle and necessity unlike before when it (travel) used to be perceived as a luxury.”

“I believe that before year-end, we will be getting very close [to], if not at, the same level as 2019,” Delgado says, adding that this pace of recovery, could mean that Marriott will be able to enjoy an even better year in 2023.

Demand from the domestic market has seen double-digit growth, following the pandemic. With China’s borders remaining closed, Delgado says, the domestic market continues to be a critical player for all of the group’s destinations in Malaysia. She foresees that this trend will continue in 2023. Accordingly, Marriott is focusing all its efforts on domestic tourism. It is noteworthy that prior to the pandemic, China was Malaysia’s second-highest foreign tourist arrival market


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