A Marriott flag hangs at the entrance of the New York Marriott Downtown hotel in Manhattan, New York

Marriott rides leisure travel demand to offset China drag, shares at record

By Ashwini Raj

(Reuters) -Marriott International Inc on Wednesday topped estimates for third-quarter revenue and profit as a strong rebound in leisure travel helped counter a hit from fresh restrictions in Asia caused by the Delta variant.

The company’s shares rose 4% to hit a record high in morning trade as the hotel operator also projected that leisure demand could continue to grow into 2022.

Occupancy rates in most major markets improved from pandemic lows with vaccinations and the reopening of economies encouraging more people to travel, but China’s zero COVID-19 policy had an impact.

The recovery in Greater China has been choppier, but globally leisure travel remained very strong throughout the quarter, Chief Executive Anthony Capuano said.

Demand in Mainland China fell significantly in August after the government imposed strict lockdowns in response to small regional COVID-19 outbreaks, Marriott said.

The company does not disclose country wide revenue but the Asia-Pacific region is its third-largest contributor.

Brokerage Jefferies said it expects demand in Mainland China to trend upward in the near term, as COVID-19 tensions ease and business and group bookings accelerate.

Meanwhile, occupancy in the JW Marriott and Ritz-Carlton owner’s key U.S. & Canada region stood at 63.5% in the third quarter, compared to 37% a year earlier. Europe occupancy was at 46.7%, up 26.3% from the same period in 2020.

Excluding items, the company earned 99 cents per share in the third quarter, beating expectations of 98 cents.

Revenue rose 75% to $3.95 billion, topping estimates of $3.81 billion.

(Reporting by Ashwini Raj; Editing by Shailesh Kuber and Sriraj Kalluvila)