A surge in summer travel to Europe has been a boon for hotel giants Marriott International and Hilton, with both companies citing the return of international travel to Europe as a key revenue driver during the second quarter.
In an Aug. 2 call with analysts, Marriott CFO Leeny Oberg said Europe had “the fastest RevPAR recovery of all our regions this year.” She added that Marriott’s RevPAR in Europe exceeded 2019 levels in June, marking a 57 percentage point increase from January.
Hilton CEO Chris Nassetta echoed Oberg’s sentiments during Hilton’s second-quarter earnings call in late July, calling the region’s rapid turnaround “a big surprise.”
“Europe is on fire, with a huge increase in business,” Nassetta said. “Europe is now trending over 2019”.
In addition to European demand, a material improvement in business travel and group demand helped strengthen both companies in the quarter, particularly in markets such as the US and Canada.
According to Nassetta, Hilton saw US business travel RevPAR surpass previous peak levels in June thanks to a return in demand “across all industries,” while group bookings similarly began to recover during the quarter.
“The mix of the group is starting to normalize with the percentage of company meetings increasing,” Nassetta said. “Bookings for corporate collections strengthened each month of the quarter, with a tentative pipeline for the year up materially versus 2019.”
Marriott CEO Tony Capuano expressed a similarly bullish outlook on group demand, telling investors that for the month of June, Marriott’s group RevPAR in the US and Canada was down just 1% compared to June 2019; in contrast, it had fallen by 17% in March.
Capuano characterized the acceleration in corporate travel, however, as “more moderate” in pace.
“Small and medium-sized businesses are back above 2019 volume levels,” Capuano said. “The bigger corporate customers, they haven’t come back yet, but even there we continue to see steady improvements, although not necessarily as fast as we would like.”
Meanwhile, both Nassetta and Capuano highlighted a mix of business and leisure travel, known as leisure or blended travel, as a trend to watch.
Capuano said corporate and association meeting planners are starting to inquire about making booking leisure travel more seamless.
“They’ve asked us from a technology perspective to do everything we can to make it easier for them to jump into a few days of free time to book their pre- or post-meeting, which was just another confirmation that this trip mixed [trend] is likely to last beyond the end of the pandemic,” Capuano added.