Marriott International plans to further expand in the midscale segment, with Marriott CEO Anthony Capuano saying during Wednesday's Q1 earnings call that the company is working on another midscale offering.
Described by Capuano as "a conversion-friendly midscale brand," the concept will be revealed in approximately a month. Capuano said adding a conversion-friendly brand is important during a time when it's more difficult to get financing for new hotels.
This latest launch will follow Marriott's foray into the midscale space in 2022 with its acquisition of the City Express brand in Mexico. The company expanded further in the segment with last year's launch of StudioRes, a midscale extended-stay brand, and Four Points Express by Sheraton, which is targeted toward "value-conscious consumers."
Competitor IHG Hotels & Resorts last year launched Garner, a midscale brand focused exclusively on conversions.
U.S. leisure demand 'normalizing'
While Marriott reported a 4.2% increase in global revenue per available room (RevPAR) for the first quarter, Capuano said U.S. and Canada demand had "normalized," with the pair seeing a 1.5% uptick in RevPAR. The company reported international RevPAR growth of 11.1%.
"Leisure RevPAR was flat in the U.S. and Canada, with more customers going abroad to find warmer weather," said Marriott CFO and executive vice president for development Leeny Oberg, adding that there was strong demand in groups and corporate travel.
Both Capuano and Oberg remained positive about overall U.S. and Canada performance.
"I might have a deeper concern if we were reporting to you U.S. and Canada had negative RevPAR," said Capuano. "Leisure was flat relative to last year's first quarter, but still meaningfully ahead of where we were back in 2019."
First-quarter net income totaled $564 million, down from $757 million a year earlier.