Analyst Note| Dan Wasiolek |
Narrow-moat Marriott’s second-quarter global revenue per available room improved to 56% of 2019 levels (versus 62% for Hilton), up from 42% in the first quarter (45%), led by the U.S./Canada and China regions. U.S./Canada revPAR reached 61% of prepandemic levels versus 43% in the prior three months, while China revPAR surpassed 2019 marks this past spring. Strength continued into July, with U.S. revPAR rebounding to 84% of 2019 levels. We were encouraged to hear that U.S. group bookings for all future dates returned to 71% of prepandemic marks in June, up sharply from 44% in March, with rates having largely fully recovered. As a result, we plan to maintain our 2021 revPAR forecast of low 60s of 2019 levels, with a full recovery by 2023. We don’t plan a material change to our $130 fair value estimate, leaving the shares slightly overvalued.