Marriott posts big profit beat, sees business travel picking up
Brian Sozzi and Myles Udland discuss Marriott International’s Q2 earnings which topped estimates, with net income coming in at $422 million, compared to a reported net loss of $234 million in the same period in 2020.
Video transcript
MYLES UDLAND: All right, let's also finish out this segment, talking about Marriott's latest results. The company coming out beating on the bottom line, slightness on the top line, but turning that profit, Sozzi, and one of the larger profits we've seen, I think the largest if my quick check here on the sector is correct, among the major hotel chains during second quarter earnings.
BRIAN SOZZI: You have to give a shout out to Marriott CEO, new CEO Tony Capuano. He gains a lot more street cred with me this morning. He talked to me. He told me about 2 and 1/2 weeks ago.
We sat in a penthouse suite in a Marriott in New York City. He said our results are improving. Leisure is improving. Business trends are improving here.
And he came out today. And he delivered a massive earnings beat. Sales a little light. But even still, coming out on the earnings release saying this morning, those trends continued into July, leisure-- business travel is lagging leisure. But all in all, this was a pretty good quarter for a company that is only seeing, I believe, worldwide occupancy levels of 51%. These are not normal times for this company.
MYLES UDLAND: Yeah, and that occupancy level-- where do you think Marriott thinks it can get to in 18 months? 70%.
BRIAN SOZZI: If business travel gains steam. If it gains steam. It just has to. People have to go back out there and traveling. I'm getting ready to go on a business trip.
MYLES UDLAND: Do you think there's too many rooms?
BRIAN SOZZI: There are a lot of rooms.
MYLES UDLAND: Like system wide, do you think that this industry ends up spinning out different parts of its brand because there's just too much capacity in it.
BRIAN SOZZI: And I did ask Capuano about that. But that has been a long running theme within the hotel industry. A lot of Marriott-- they're still opening thousands of rooms. They continue unabated.
It's not just the US. It's international, thousands of rooms. That has never seemed to bear fruit in terms of pressure, RevPAR, or other metrics. So not a problem.
MYLES UDLAND: Those-- KKR's results are out this morning. Dry powder is up 68%. Maybe they can go buy some hotel rooms.
BRIAN SOZZI: Yeah, why not?
MYLES UDLAND: Buy a couple of brands out of the portfolio. Compete with Airbnb.
