by Michael J. Shapiro | August 07, 2018

In discussing Marriott's second-quarter performance, president and CEO Arne Sorenson attributed rising room rates in North America to the company's solid group business in the region. Average daily rate grew 3 percent year-over-year in the company's North American luxury segment for the quarter, and 2.8 percent at upper-upscale properties. In many markets outside of North America, strong transient demand propelled performance.

"We were pleased with our performance in the quarter across the board," Sorenson said. Revenue per available room rose 3.8 percent year-over-year worldwide -- 3.1 percent in North America and a hefty 5.7 percent elsewhere in the world. ADR increased by 2.3 percent at all properties worldwide. The company exceeded its guidance in terms of both gross fee revenues and earnings.

And the world's largest hospitality company continues to grow. "Our owners opened more than 82,000 rooms over the last 12 months, yielding net rooms growth of 5.7 percent," Sorenson continued. That includes 23,287 new rooms that debuted in the second quarter alone. "Over 40 percent of these gross room additions [in the past year] are located outside North America, and more than one-third are in upper-upscale and luxury tiers," he added. There were about 466,000 rooms in Marriott's development pipeline at the end of the second quarter.

Marriott is expecting third-quarter RevPAR in North America to inch up 1.5 to 2 percent year-over-year, with stronger growth outside of North America of 5 to 6 percent. Overall, the company projects third-quarter worldwide RevPAR growth to rise 2.5 to 3 percent.