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Europe’s summer travel boom has benefited hotel giants Marriott International and Hilton, with both companies counting international travel to Europe as a key driver of revenue in the second quarter.
In an Aug. 2 call with analysts, Marriott CFO Lenny Oberg said Europe had the “fastest RevPAR recovery of all regions this year.” She added that Marriott’s RevPAR in Europe surpassed 2019 levels in June, a 57-percentage-point increase from January.
Chris Nassetta
Hilton CEO Chris Nacetta echoed Oberg’s sentiment during Hilton’s second-quarter earnings call in late July, calling the region’s rapid turnaround “a big surprise.”
“Europe, with its boom in trade, is on fire,” Naceta said. “Europe is trending now beyond 2019.”
In addition to European demand, material improvement in business travel and group demand helped strengthen both companies during the quarter, particularly in markets such as the US and Canada.
According to Naceta, Hilton’s US business travel RevPAR surpassed its all-time high in June as group bookings rebounded in the same quarter as demand returned “across industries.”
“Mixed teams are starting to become the norm with an increasing percentage of company meetings,” Nasetta said. “Bookings for company meetings strengthened each quarter, compared to the estimated pipeline for the year in 2019.”
Marriott CEO Tony Capuno expressed a similarly bleak outlook around group demand, telling investors that Marriott’s US and Canada group’s RevPAR in June was down 1% compared to June 2019. In contrast, it fell by 17 percent in March.
Capuano described an acceleration in corporate travel, but at a “more moderate” pace.
Tony Capuno
“Small and medium-sized businesses are back above 2019 volume,” Capuno said. “The big corporate customers, they haven’t bounced back yet, but even there we continue to see steady progress, although not as fast as we’d like.”
Meanwhile, both Naceta and Capuano highlighted the integration of business and leisure travel, known as bleisure or hybrid travel, as a trend.
Capuano said corporate and union meeting planners are starting to inquire about making Blair’s trip more seamless.
They’ve asked us to do everything we can from a technology perspective to make it easy for them to book two leisure days to spend pre- or post-meeting time, which is another proof of this blended travel. [trend] “It can last well after the end of the epidemic,” Capuno added.
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