Marriott International (MAR) tends to stand strong in the wake of global turmoils. The stock has rewarded investors irrespective of the multiple crises we have seen in the last 5 years. With exciting developments on the list, stemming from China's economic recovery and solid progress in the Asia-Pacific region, MAR is now set to take the next big leap.
Based in Maryland, Marriott International, Inc. operates and franchises lodging facilities, including hotels, residential, and timeshare properties. Marriott International Inc. is a giant in hospitality, with a portfolio of famous hotel brands worldwide, including JW Marriott, The Ritz-Carlton, Sheraton, Westin, and Courtyard by Marriott.
Revenue is primarily earned from the proceeds of room sales, food and beverage offerings, events, and hotel franchise fees derived from the franchised operators. Additionally, leisure and business travelers form a significant part of the giant's end market. With an emphasis on creating great hospitality experiences in urban and resort settings, MAR has nearly 9,000 properties across 141 countries and territories.
In 2Q24, MAR's revenues peaked at $6.4 billion with a strong 6% YoY growth and a global 4.9% RevPAR (Revenue per available room). China's domestic demand is still weak, but MAR is not pulling back from China as it recently signed 63 new deals, of which 30 are to open within the next year. This is not the case in APAC, where the recovery continues with rebounding international travel and unexploited potential for RevPAR recovery.
China's economy is slowly emerging from its doldrums. The reported 3Q24 GDP growth is 4.6%, slightly higher than the expected 4.4%. Retail sales and industrial production have leaped sharply due to aggressive policy moves, including rate cuts and a $113 billion injection of liquidity. This provides MAR with an opportunity to increase its presence and solidify its market position.
A resurging global RevPAR and a thriving APAC market, along with China's economy rebounding, form sound ground for our bullish thesis. As China stages a comeback, Marriott should get the benefit, which will eventually trickle down to shareholders in the form of dividend yield and capital appreciation.
Marriott International is not on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held MAR at the end of the third quarter which was 54 in the previous quarter. While we acknowledge the potential of MAR as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as MAR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.