Marriot shares slide on delayed opening of some properties in China
Nov 3 (Reuters) - Marriott International Inc (MAR.O) said on Thursday China's strict COVID-19 policies were delaying openings of some properties in the country, a key market for hotel operators, where pandemic recovery has been uneven compared to United States.
"The market in China is most certainly where we're seeing the most challenges," Chief Executive Anthony Capuano said during an analyst call.
Shares of the Sheraton-owner fell as much as 6% in morning trade. Revenue per available room (RevPAR) from Greater China was $64.06 in 2021 company-wide, behind U.S. & Canada and Middle East & Africa.
U.S. companies have had a tough time in dealing with China's zero-COVID policy this year, with some companies such as Tesla (TSLA.O) keeping workers isolated to keep factories running. Those involved in the real estate sector have also had to deal with a property crisis.
About 60% of Marriott's projects in the pipeline in China are in the luxury and upper upscale tier, which are significant money generators, Capuano said.
The company, however, continued to benefit from strong travel demand elsewhere despite economic headwinds, with Marriott joining its rival Hilton Worldwide Holdings Inc (HLT.N) in raising its annual profit forecast on Thursday.
"Looking forward we expect that the recession will mute, but not derail, growth in the U.S. hotel industry. This may, in fact, be the first recession where GDP declines while RevPAR continues to grow," said Jan Freitag, CoStar Group's national director of hospitality analytics.
Marriott now expects 2022 adjusted profit per share of between $6.51 and $6.58, compared with its previous forecast of $6.33 to $6.59 per share.
For the quarter through September, Marriott posted a 36.3% rise in RevPAR at $120.60, compared to a year earlier on a constant currency basis.
Its revenues rose nearly 35% to $5.31 billion, falling slightly short of analysts' average estimate of $5.34 billion, as per Refinitiv data.
Adjusted profit per share was $1.69, one cent above expectations.
(This story has been corrected to say "one", not "once" in last paragraph)
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