The broader hotel industry endured a rough first quarter, but Marriott International executives have maintained a positive outlook in their portfolio's performance in 2024.
Leeny Oberg, chief financial officer and executive vice president of development at Marriott International, said her company is projecting global revenue-per-available-room growth of 3% to 5% this year.
STR and Tourism Economics downgraded their 2024-25 U.S. hotel forecast on Monday, with projected rate gains in average daily rate and RevPAR down 1 and 2.1 percentage points, respectively, for 2024. The forecast projects year-over-year U.S. hotel RevPAR growth of 2%.
The demand for travel is robust across all travel segments in Marriott's portfolio so far in 2024, and the interest in travel and tourism is still at a high level across the industry, Oberg said.
"When you look more broadly, and you think about the fundamentals that drive our business and you see a fairly stable economy in the U.S. and continued really great interest in travel, both domestically and abroad, that it does bode well for the industry, not just this year, but for years to come," Oberg said on the HNN podcast at the 46th annual NYU International Hospitality Industry Investment Conference.
High interest rates have caused some pause in development, but Oberg said investors have become more acclimated with the higher rates. Even though there haven't been any interest rate cuts this year, Marriott had 25% more construction starts in the first quarter of 2024 compared to the first quarter of 2023.
"Financing for strong brands, strong locations, well-known developers who have a proven track record, I think you absolutely are seeing availability of financing, which helps lead to this continued growth and construction starts," she said.
Marriott provided some information on its new midscale brand, currently operating under the name Project Mid-T, at the conference. Oberg said the conversion-friendly brand will provide flexibility to owners and franchisees alike.
"We've done really well in the select brand space in terms of delivering great returns to our owners and franchisees, and this adds one more opportunity for them to invest with us," she said.
For more from Oberg, listen to the podcast linked above.