Anthony Capuano
Chief Executive Officer at Marriott International
Thanks, Jackie, and good morning, everyone. I am very pleased with our second quarter results and the accelerating pace of the global recovery. The tremendous overall improvement we saw in both occupancy and rate in the quarter demonstrate a basic premise, people love to travel and to stay at our hotels. Demand grew steadily throughout the second quarter. Worldwide occupancy gained six percentage points in the month of June compared to May and topped 55%. Average daily rate in June was down only 13% from June two years ago. As a result, global RevPAR has risen meaningfully and swiftly from the depths of the pandemic when RevPAR was down 90% to down just 38% in June compared to the same month in 2019.
Recovery time lines vary by region, given uneven vaccination trends, virus caseloads and travel restrictions, yet we remain encouraged by the incredible resilience of travel demand, demonstrated by the rapid return of guests in areas where rules have been eased and people feel they can travel safely. This can be seen most keenly in Mainland China, the first major market where RevPAR has recovered to pre-pandemic levels. RevPAR in the second quarter was driven by very strong demand, resulting in ADR exceeding 2019 levels. Occupancy reached 71% in April and 68% in May before dipping to roughly 60% in June due to small COVID outbreaks and strict lockdowns in certain markets. Demand recovered quickly once the restrictions were lifted, as we've seen throughout the last year. July RevPAR is again expected to exceed 2019 levels.
Perhaps most encouragingly, in April, for the first time since the pandemic began, leisure transient, business transient and group room nights in Mainland China were all ahead of 2019 levels. This is especially impressive given the absence of international arrivals due to stringent border restrictions. The US and Canada accounts for roughly two-thirds of our rooms. And in this region, lodging demand grew impressively during the quarter, led by increasingly strong leisure demand as the number of vaccinated people continued to rise.
US leisure room nights in the second quarter were 15% higher than in the second quarter of 2019, though we are seeing more blending of trip purpose with the more flexible work from home or anywhere trend. Total US occupancy reached over 63% in June, with ADR down just 11% versus June of 2019. Our strong momentum has continued into the first 3.5 weeks of July. With US occupancy reaching 67% and ADR down only 2% compared to July of '19. July RevPAR for this period was down around 16% versus July of 2019.
The US is also seeing increasing signs of recovery in both special corporate and group demand. While special corporate booking levels in the first 3.5 weeks of July are still down around 45% compared to the same period in '19, we are optimistic that we've turned a corner. US special corporate bookings rose 23% in June over May and then rose another 27% in the first 3.5 weeks of July as compared to the first 3.5 weeks of June, with improvement widespread across industries and lengthening booking windows.
Many of our corporate customers are telling us they are beginning to get back on the road this summer, and we expect to see a step-up in business travel post Labor Day as children go back to in-person learning and workers increasingly return to the office. Group bookings in the US have also gained momentum. US group bookings made for all future dates were down 29% in June compared to those made in June of '19, a large improvement from down 56% in March of '21 versus March of '19. And for the first time since the pandemic started, group bookings made in the month of June or any time in 2021 exceeded in-the-year bookings made in the same month of 2019.
At the end of the second quarter, group revenue pace versus '19 was down 31% for the fourth quarter of this year, improving to down 21% for the first quarter of '22 and then down 12% for the second quarter of '22. However, it's still early, and we expect bookings made closer to the event date will increase group revenue on the books for these time periods.
Most importantly, our sales team is holding on to average daily rate. ADR for group bookings is almost flat for the fourth quarter and 3% higher for full year 2022 compared to the same periods in 2019. In other regions of the world, demand in the second quarter improved over the first quarter in the Middle East and Africa, in the Caribbean and Latin America and in Europe. Middle East, Africa is benefiting from relatively high vaccination rates in many countries in the Middle East. Occupancy strengthened to 47% in June, largely driven by staycations in the UAE and quarantine business. Occupancy in Caribbean and Latin America improved meaningfully during the quarter, rising to 45% in June, while urban destinations continue to struggle, given slow vaccination rates and high COVID case counts, many of our resort properties in the Caribbean and Mexico are flourishing as they benefit from easing international travel restrictions and their close proximity to the US.
Europe's recovery is still lagging given its heavy reliance on international guests, slower border reopenings and shifting restrictions that change on short notice. Yet, with the EU easing many travel restrictions beginning in May and an increasing number of hotels reopening, occupancy doubled in just three months, reaching 31% in June. The recovery in Asia Pacific, excluding China, stalled in the second quarter as countries such as Japan, India, South Korea and Australia imposed strict lockdowns in response to sharp rises in delta variant cases and low vaccination rates. Encouragingly, the recovery is now picking up steam again as caseloads in some countries like India have started to decline.
Shifting to the development front. Our pipeline stood at nearly 478,000 rooms at the end of the second quarter. Openings were strong, with nearly 25,000 rooms added to our system during the quarter. And deal signings were also healthy. Additionally, less than 2% of rooms fell out of the pipeline, one of the lowest levels we've seen in the last three years. We are very pleased with our momentum around conversions as well. Conversions accounted for 26% of rooms added in the first half of this year and have been a meaningful contributor to signings. We continue to have the largest pipeline of global rooms under construction.
We are also seeing great momentum around our branded residential business, with a record 18 residential properties expected to open during the year. For the full year, we expect that gross rooms growth will accelerate to approximately 6%. And with more visibility into anticipated full year deletions, we now expect 2021 net rooms growth to be towards the higher end of our previous expectation of 3% to 3.5%. As a reminder, this estimate includes the 100 basis point headwind from the 88 Service Properties Trust hotels that left our system earlier this year. We are pleased with the continued progress on replacing those hotels with new products. We are now in conversations for 80% of those locations, with signed or approved deals for nearly 20%. We continue to enhance and expand Marriott Bonvoy into an immersive travel platform that includes multiple products and offerings that enable us to provide value to our members beyond hotel stays. The program grew to over 153 million members at the end of the quarter.
Homes & Villas by Marriott International, or HVMI, which currently has around 35,000 whole-home listings, has been an attractive offering and tool for engaging with members throughout the pandemic.
With nearly 40% of listings in markets where we don't have distribution, HVMI is expanding the number of destination options for our guests. Over 90% of HVMI room nights in the quarter were booked by Bonvoy members. Our co-branded credit card holders were very active in the second quarter, with global card spending surpassing the same period in 2019.
Global card acquisitions were also strong, reaching 2019 levels. Our recent credit card launches in South Korea and Mexico have seen strong initial interest from consumers in those markets. The South Korean card issuer, Shinhan Financial Group, touted the launch of our card as one of the most successful premium card launches they have ever had. Our total co-brand credit card fees in the second quarter surpassed those in the same quarter of 2019 for the first time since the pandemic began.
We've also been very pleased with our successful Uber collaboration in the US. The number of members linking their accounts to date has far exceeded our expectations. Activated accounts were already averaging six transactions in just the first 10 weeks, demonstrating our ability to drive real engagement with our Marriott Bonvoy members beyond the hotel beyond the hotel stay.
We're always working on innovative ways to enhance our guests' full travel experience. Just last week, we became the first major hotel company to provide US-based customers, with the opportunity to purchase travel insurance. Guests can now buy travel insurance when they make a reservation through Marriott's website or mobile app by linking to approved products sold by Alliance partners. As part of this distribution agreement, Marriott will earn commissions from Alliance. In another effort to connect with Bonvoy members beyond the hotel stay, we are piloting a program that allows members to earn and redeem points at food and beverage outlets in select hotels, even if the member is not staying in the hotel. The program is currently in over 200 outlets in Asia Pacific and the Middle East, with expansion to over 500 outlets expected by the end of the year.
We also remain keenly focused on engaging with another key constituency, our owner and franchisee community. We have worked closely with them throughout the pandemic to help lower costs significantly. With some meaningful improvement in demand, profitability for many hotel owners accelerated in the second quarter.
As the recovery continues, we are aligning with our owners and franchisees to balance two important goals as we think about our path forward, maximizing hotel-level cash flow and driving great guest experiences, as Leeny will discuss in more detail. We are also working to address the labor challenges we are seeing, mainly in the US in markets such as Southern Florida, Texas and Arizona, where demand has rebounded quickly.
To that end, we are increasing our social and targeted marketing of Marriott as a best employer with career advancement opportunities as well as holding job fairs to reach qualified candidates. Hiring tools, including onetime sign-on bonuses and temporary incentives, sometimes in combination with base salary adjustments in select markets, are also being successfully employed.
Before I turn the call over to Leeny, I want to thank our amazing team of associates around the world. I have spent time in Los Angeles, Miami and New York over the last couple of weeks as I've been getting back on the road again. It has been wonderful to visit our hotels and to meet with so many of our associates and see firsthand their passion and resilience. These have been challenging times, but we are looking forward with optimism. While the time line is uncertain, I am confident that our business will fully recover and continue to grow from there. Leeny?
