[Update] Record-breaking hotel performance in 2023

8 min reading time

Published on 01/03/24 - Updated on 01/03/24

Résultats financiers 2023

The year 2023 has confirmed the recovery in the hotel business, as demonstrated by the financial results of Minor, Hilton, Marriott, Wyndham, IHG, Choice, Ascott and Melia. All performance indicators are in the green and on the rise, allowing the hotel groups to move forward once and for all after the lacklustre results of previous years.

Minor Hotels has reported record full-year core revenue of 3.4 billion dollars in 2023, which represents a core net profit growth of 450% compared to the previous year. The record core revenue was 25% higher versus 2022, with topline total system sales reaching 4.4 billion dollars. A growth due to its key markets, Europe and Thailand, where core revenue grew 25% and 65% respectively on last year.

Resurgent demand for leisure and business travel drove strong rate growth across Minor's portfolio, with group-wide ADR increasing by 10% compared with last year. Much of that rate growth was driven by hotels in Thailand where ADR across all Minor Hotels properties was up 29% on 2022. Combined with an occupancy up by 6%, the group's RevPAR rose 22% versus 2022.

The strong growth trend is expected to carry through 2024, with room revenues in January and on-the-book value in February and March already surpassing 2023 levels by 39% in Thailand, and 20% in Europe. Minor Hotels added a total of 1,257 rooms to its inventory in 2023, but has announced plans for aggressive expansion of its hotel portfolio over the next three years, with a target to add 200-250 new hotels.

Part of Minor Hotel's portfolio, NH Hotel Group ended 2023 on a high note, with sales of €2.16 billion, up 23% on 2022 and 26% on 2019. Reported net profit was €128.1 million, equivalent to annual growth of 27.7%. EBITDA amounted to €596 million, up 15% on 2022.

While recurring net profit was up 66.3% on 2022, at €126 million, the Group's gross financial debt fell by €129 million to €264 million, compared with €308 million the previous year. This reduction in net debt is the result of solid operational cash generation and the repayment of loans.

These positive results are due to a remarkable performance throughout the year. Indeed, NH Hotel Group saw its average daily rate increase by 13% and its occupancy rate rise by 7 points in 2023. The Group's RevPAR thus stood at 94 euros per night, marking growth of 26% compared with 2022 and 21% compared with 2019.

Southern and Central Europe and the Benelux countries were major contributors to NH Hotel Group's performance over the year as a whole. In Spain, Portugal and France, like-for-like sales were up 17% and 30% on 2022 and 2019 respectively, while in Italy they were up 19% and 36%.

In the Benelux countries, like-for-like sales grew by 25% compared with 2022 and by 12% compared with 2019, thanks in particular to the performance of Amsterdam and Brussels. In Central Europe, like-for-like sales were up 17% year-on-year and 10% on 2019 levels, with Düsseldorf, Munich and Frankfurt the best-performing destinations.

Finally, in Latin America, sales were up 12% on 2022 and 31% on 2019. Growth was strongest in Mexico and Argentina, the latter being affected by hyperinflation and currency depreciation, which slightly worsened the group's financial results.

For Hilton, net profit in 2023 was $1,151 million, with adjusted EBITDA of $3,089 million. Comparable system-wide RevPAR is up 12.6% on 2022 and 10.7% on 2019. This momentum was particularly evident in the fourth quarter, which saw a net profit of $150 million and adjusted EBITDA of $803 million.

The year was also rich in growth for the American group, with a record pipeline of 462,400 rooms at 31 December 2023, up 11% on the previous year. Of this total, 33,800 new rooms were approved during the last quarter. In the fourth quarter, 24,000 rooms were added to the Hilton system, resulting in 62,900 room openings for the full year, contributing to net unit growth of 4.9%.

The outlook is equally encouraging for 2024 with system-wide RevPAR expected to increase 2.0% to 4.0% on a comparable, currency-neutral basis over 2023. Net profit for the full year is expected to be between $1,694 million and $1,729 million while EBITDA is expected to be between $3,330 million and $3,380 million. Return on capital for the full year 2024 should therefore be around 3 billion dollars.

Buoyed by these more than positive results, the Group is pursuing its growth strategy, and has entered into a partnership with Small Luxury Hotels of the World to strengthen its position in the luxury segment.

Regarding Marriott full year 2023 results, the group saw its global RevPAR rose by 15% and net rooms grew  by 4.7%. Marriott added 558 properties (81,281 rooms) to its worldwide portfolio during 2023, including approximately 17,500 rooms associated with the City Express transaction and more than 43,000 other rooms in international markets.

At the end of the year, the company’s worldwide development pipeline totaled 3,379 properties with roughly 573,000 rooms, including 126 properties with over 21,000 rooms approved for development, but not yet subject to signed contracts. The year-end pipeline included 1,066 properties with more than 232,000 rooms under construction.

In 2024, we expect another year of solid growth and significant shareholder returns. With normalizing RevPAR growth around the world, we anticipate a worldwide full year RevPAR increase of 3 to 5 percent and net rooms growth of 5.5 to 6 percent. We expect this should yield adjusted EBITDA of approximately $4.9 billion to $5.0 billion for the year and enable us to return $4.1 billion to $4.3 billion to shareholders after factoring in $500 million to purchase the Sheraton Grand Chicago.

Anthony Capuano, President and CEO, Marriott International

On its side, Wyndham generated net income of 289 million dollars compared to 355 dollars million in full-year 2022, which included 37 million dollars from the select-service managed and owned hotels. The adjusted EBITDA was 659 million dollars compared to 650 million dollars in full-year 2022, a growth that was further impacted by 11 million dollars of unfavorable marketing fund variability.

Regarding the RevPAR evolution, it grew 5% in constant currency compared to 2022 reflecting a 1% decline in the United States and growth of 21% internationally. Internationally, year-over-year RevPAR growth for the full-year was primarily driven by higher occupancy levels.  Compared to 2019, international RevPAR grew in  full-year by 36%, on a constant-currency basis.

The Company’s global system grew 3.5%, marking 12 consecutive quarters of organic growth and reflecting 1% growth in the United States and 7% internationally.  These increases included strong growth in both the higher RevPAR midscale and above segments in the United States and the direct franchising business in China, which grew 3% and 13%, respectively. 

At the end of the year, Wyndham's global development pipeline consisted of over 1,950 hotels and approximately 240,000 rooms, representing another record-high level and a 10% year-over-year increase. Approximately 70% of the pipeline is in the midscale and above segments, and approximately 58% of the pipeline is international. Furthermore, 79% of the pipeline is new construction, of which approximately 34% has broken ground.

We are confident in the continued effectiveness of our growth strategy and see exceptional value-creation opportunities in the years ahead.

Geoff Ballotti, President and CEO, Wyndham Hotels & Resorts

The year 2023 also marks a strong evolution in IHG's performance, with total revenues of $4.624 million compared with $3.892 million in 2022, an increase of 19%. Operating income was $1.066 million, a remarkable 70% increase on the previous year. Adjusted EBITDA was also 21% higher than in 2022, at $1,086 million.

This growth is driven in particular by RevPAR, which is also up, +7% vs. 2022 and +10.9% vs. 2019. Greater China and Europe lead this performance trend, with RevPAR up by 71.7% and 23.7% respectively vs 2022. While the occupancy rate is only 1% higher than in 2019, the average price is 13% higher than its pre-Covid level.

2023 was also a year of expansion for the British group, with net network growth of 3.8%. IHG opened 275 new hotels, representing 47,900 rooms, taking its hotel portfolio to 6,363 hotels, or 946,000 keys. The pipeline is just as strong, with 556 new hotels signed (79,200 rooms), bringing the total pipeline to 2,016 hotels worldwide.

Choice's total revenues grew 10% to 1.5 billion dollars for full-year 2023 compared to the same period of 2022. EBITDA for full-year reached a company record of $540.5 million, a 13% increase compared to 2022, and exceeded the top end of the company's full-year 2023 guidance. These performances are driven by an increasve in the RevPAR, +12,7% compared to 2019.

The company's total domestic system size increased to over 6,300 hotels and nearly 497,000 rooms as of December 31, 2023. Choice's domestic upscale, extended stay, and midscale portfolio increased by 1.4% for hotels and 1.6% for rooms while domestic upscale and extended stay rooms portfolio grew by 6.3% and 14.9%, respectively, since December 31, 2022. During the year, the group opened 263 new hotels. The international portfolio, as of December 31, 2023, expanded by 2.6% in the number of units and by 2.0% in the number of rooms from December 31, 2022.

Domestic rooms pipeline increased by 3% since September 30, 2023, highlighted by a 6% increase for conversion hotels. As of December 31, 2023, the international units pipeline increased by 33% from September 30, 2023, and the company more than doubled the number of international hotels in the pipeline since December 31, 2022.

The group expects as good performances in 2024 with a projected net income ranging between 260 and 274 million dollars, and an EBITDA ranging between 580 and 600 million dollars.

Ascott announced a 28% year-on-year increase in fee-related earnings to S$331 million, up from S$258 million in full year 2022. The company also achieved the highest number of property openings with nearly 9,600 units turning operational in the same year. Riding on a strong momentum of travel recovery, RevPAR grew 20% over 2022 from higher average daily rates and occupancies.

Regarding the company's expansion, 77 new properties across all brands were signed in 2023. The strong growth trajectory enabled Ascott to surpass its year-end target and secured 160,000 units earlier than expected in March.

The strong performance was underscored by our diverse portfolio of brands and strategic presence in new destinations. This is an important milestone to mark Ascott’s transformative journey to become a global leader in hospitality, as we celebrate 40 years of service this year. Harnessing our extensive network of third-party owners and in-market expertise, Ascott remains focused on driving asset light growth organically through management and franchise agreements.

Kevin Goh, CEO for Ascott and CLI Lodging

Spain's Meliá Group posted sales of €1.928 billion, up 14.8% on 2022. Adjusted EBITDA was €486.5 million, an increase of 16.2% on the previous year. At the same time, Melia's net debt has been reduced by €60 million thanks to the Group's strong performance over the full year 2023. In particular, the Group saw its overall RevPAR rise by 17.3% relative to 2022.

In 2023, Melia signed 26 new hotels, representing more than 4,440 keys, and also opened 12 properties, adding 2,300 rooms to its portfolio. The Group's pipeline is just as dynamic, with 64 new properties due to open shortly. The year 2024 looks set to be just as positive for the Iberian operator, with first-quarter bookings higher than last year.

2023 concludes as a good year for Meliá's hotel business, driven by solid demand, whose evolution since 2022 supports the strategy we have deployed at Meliá Hotels International. The buoyant currents of international tourist demand have undoubtedly helped us to achieve the annual results we are presenting today, combined with a demanding strategic roadmap that gives priority to consolidating the quantitative and qualitative growth of our portfolio and strengthening the efficiency of our management, helping to support our margins despite the inflationary context, while reaffirming our position as one of the leading sustainability companies in our sector, according to the prestigious S&P's Global ranking.

Gabriel Escarrer, CEO of Meliá Hotels International

 

NH Hotel Group

NH Hotel Group

Hotel Group

  • NH Hotel Group Spain
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Hilton

Hilton

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Marriott International

Marriott International

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Wyndham Hotels & Resorts

Wyndham Hotels & Resorts

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InterContinental Hotels Group

InterContinental Hotels Group

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Ascott International

Ascott International

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Meliá Hotels International

Meliá Hotels International

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  • Meliá Hotels International Spain
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