Marriott Earnings: Global Group and International Demand Drive Growth as US Leisure Normalizes

There won’t be much change to our $220 fair value estimate for narrow-moat Marriott International after the hotelier posted first-quarter revenue per available room growth of 4% versus our 4% estimate and management’s 4%-5% guidance. We caution against overreacting to Marriott’s comments that US leisure and China revPAR might come in slightly lighter than previously expected over the rest of this year; both are still set to grow in 2024 and remain at all-time highs, signaling normalization in demand versus deterioration, in our view. Further, management now anticipates rest-of-the-world revPAR will come in stronger than previously thought, with both business and group growing globally this year. As a result, Marriott reiterated its 2024 revPAR growth guidance of 3%-5%, and we plan to lift our 3.5% forecast to around 4%.