Most of the major players in the hotel industry reported Q4 results in February, painting a mixed picture for 2023 and more temperate outlook for the coming year. With “revenge travel” drying up, airfares and hotel rates returning to pre-pandemic levels (if not higher), and disposable income squeezed by the resumption of student loan payments and high interest rates, there are speedbumps for travelers. And while double-digit revenue growth for the industry should evolve into more moderate single-digit growth, it looks like travel may be settling into a more normal environment.
Breaking down Q4 earnings within the hotel industry by market capitalization, Marriott (NASDAQ:MAR) reported before the market open on Feb. 13. The hotel chain beat on earnings by $1.45 per share but missed revenue expectations by $110M. The company added 81,300 rooms in 2023 and reported an increase in revenue per available room, or RevPar of 7.2% in the quarter. For 2024, Marriott’s adjusted EPS guidance was below estimates and forecasted RevPar to increase by just 3-5%. Marriott’s (MAR) profit margin of 81.5% is one of the highest in the hotel industry. Shares of Marriott (MAR) were up 0.22% for the week and 10.8% year-to-date.
Hilton (HLT) reported early on Feb. 7, beating EPS expectations by 11 cents on revenue that was in-line with estimates. The company added 62,900 rooms in 2023 with RevPar up 15.7%. The company operates with a profit margin of 74.12%. For 2024, Hilton (HLT) forecasts earnings below the Street’s consensus and RevPar of just up 2%-4%. Shares gained nearly 1% on the week and are up 12.2% YTD.
InterContintental Hotels Group (IHG), the parent company of Holiday Inn, Crowne Plaza, and Staybridge Suites, among others, reported on Feb. 21 with EPS that topped estimates by 4 cents and revenue that was $10M above expectations. The company added a net of 34.5K rooms in 2023 with a 16.1% increase in RevPar compared to 2022. InterContinental Hotels (IHG) operates with a negative profit margin of 47.09%. Shares were down 2.7% from last Friday’s close and up 17.5% YTD.
Hyatt (H) Q4 earnings report before the open Feb. 23 showed a beat on EPS by $0.26 and revenue by $49M. The hotel chain added 24K new rooms with RevPar up 17% from 2022. Hyatt’s (H) profit margin is 66.91%. For 2024, Hyatt (H) projects RevPar to increase by 3-5% and adjusted EBITDA to increase by 14%-19% to be within a range of $1.175B and $1.225B. For the week, Hyatt (H) shares gained 13.3% and are up 17.7% YTD.
Wyndham (WH) reported after the close Feb 14. The company beat Q4 EPS estimates by a penny but missed on revenue, added 66K new rooms in 2023 with RevPar up 5% from the year prior. Wyndham’s (WH) profit margin is 68.06%. For 2024, Wyndam (WH) looks for RevPar to increase 2-3% from 2023, adjusted EPS to be between $4.11 and $4.23 per share and adjusted EBITDA to be in the range of $690M to $700M. From last Friday’s close, shares are down 4.4% and down 5% YTD.
Choice Hotel (CHH) reported Q4 results before the open on Feb. 20. Earnings beat estimates by 4 cents but missed revenue expectations by $11.2M. RevPar increased by 12.7% in 2023 and is expected to be flat to up 2% in 2024.At 90.6%, Choice Hotels (CHH) has the highest profit market within the hotel and timeshare industry. For 2024, adjusted earnings are forecast to be between $6.30 and $6.60 per share, below the Street consensus of $6.75. Week-over-week, Choice shares were down 2% and were down 1.2% YTD.
