Most major hotel industry players reported fourth-quarter results in February, painting a mixed picture for 2023 and a more tempered outlook for next year. As “revenge trips” dry up, airfare and hotel rates return to pre-pandemic levels (if not higher) and disposable income squeezed by the resumption of student loan payments and high interest rates, there are obstacles for travelers. And while double-digit revenue growth for the industry is expected to evolve into more moderate single-digit growth, it appears that travel may be stabilizing into a more normal environment.
Breaking down fourth-quarter earnings in the hotel industry by market capitalization, Marriott (NASDAQ:MAR) reported before the market opened on February 13. The hotel chain beat earnings by $1.45 per share but missed revenue expectations by $110 million. The company added 81,300 rooms in 2023 and saw revenue per available room, or RevPar, increase 7.2% in the quarter. For 2024, Marriott’s adjusted EPS guidance was below estimates and expected RevPar to increase only 3-5%. Marriott’s (MAR) profit margin of 81.5% is one of the highest in the hotel industry. Marriott (MAR) shares are up 0.22% on the week and 10.8% on a year-over-year basis.
Hilton (HLT) reported results early on Feb. 7, beating EPS expectations by 11 cents on revenue in line with estimates. The company added 62,900 rooms in 2023 with RevPar up 15.7%. The company operates at a profit margin of 74.12%. For 2024, Hilton (HLT) expects earnings below the Street consensus and RevPar just up 2%-4%. Shares gained nearly 1% for the week and are up 12.2% year to date.
InterContinental Hotels Group (IHG), the parent company of Holiday Inn, Crowne Plaza and Staybridge Suites, among others, reported Feb. 21 earnings per share that beat estimates by 4 cents and revenue that beat expectations by $10 million. The company added a net 34.5K rooms in 2023 with a RevPar increase of 16.1% compared to 2022. InterContinental Hotels (IHG) operates at a negative profit margin of 47.09%. Shares are down 2.7% from last Friday’s close and are up 17.5% year to date.
Hyatt (H) The fourth quarter earnings report before the open on February 23 showed an improvement in EPS of $0.26 and revenue of $49 million. The hotel chain added 24,000 new rooms with RevPar up 17% from 2022. Hyatt (H)’s profit margin is 66.91%. For 2024, Hyatt (H) expects RevPar to increase 3-5% and adjusted EBITDA to increase 14%-19% to be in a range of $1.175 billion to $1.225 billion. For the week, Hyatt (H) shares gained 13.3% and are up 17.7% year to date.
Wyndham (WH) reported after the close on February 14th. The company beat fourth-quarter EPS estimates by a penny but missed revenue, added 66,000 new rooms in 2023 with RevPar up 5% from the prior year. Wyndham (WH)’s profit margin is 68.06%. For 2024, Wyndam (WH) expects RevPar to increase 2-3% versus 2023, adjusted EPS to be between $4.11 and $4.23 per share, and adjusted EBITDA to be between $690 million and $700 million. Since last Friday’s close, shares are down 4.4% and 5% year to date.
Selected Hotel (CHH) reported fourth-quarter results ahead of the Feb. 20 open. Earnings beat estimates by 4 cents but missed revenue expectations of $11.2 million. RevPar increased 12.7% in 2023 and is expected to remain stable at up to 2% in 2024. At 90.6%, Choice Hotels (CHH) has the highest profit market in the hotel and timeshare industry. For 2024, adjusted earnings are expected to be between $6.30 and $6.60 per share, below the Street consensus of $6.75. Week over week, Choice shares are down 2% and 1.2% year to date.