Marriott raises annual profit forecast on strong travel demand

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Hotel operators have begun to reap benefits from a strong rebound in international travel as easing of pandemic-related restrictions and a strong U.S. dollar have emboldened consumers to travel overseas.

The company sees full-year adjusted profit of $8.36 to $8.65 per share, up from the prior forecast of between $7.97 and $8.42 per share.

Marriott joins rival Hilton which posted upbeat earnings last week, further underscoring the strength in consumer spending for travel.

While recession risks cloud travel spending, unabated travel demand has encouraged hotel operators to implement price hikes in the past year, enabling companies such as Marriott and Hilton to post higher profits.

Last week, payments company Mastercard (NYSE:MA) saw a 24% jump in cross border volume, a gauge of travel demand that tracks spending on cards outside the country of their issue.

Marriott, which owns hotels like Sheraton, Westin and St. Regis (NYSE:RGS), has seen a steady uptick in bookings, even as experts raised concerns over a potential economic slowdown that could dent consumer spending.

The company posted a 13.5% rise in revenue per available room, a key measure for hotels’ top-line performance, for the quarter ended June 30, compared to a year earlier on a constant currency basis.