Marriott records second quarter loss but eyes green shoots
Marriott International has reported a second quarter net loss of $234 million, compared to a net income of $232 million in same period a year-ago.
The second quarter adjusted net loss totalled $210 million, compared to second quarter 2019 adjusted net income of $525 million.
Comparable systemwide constant dollar RevPAR declined 84.4 per cent worldwide during the period, or 83.6 per cent in North America and 86.7 per cent outside North America.
Arne Sorenson, president and chief executive officer of Marriott International, said: “While our business continues to be profoundly impacted by Covid-19, we are seeing steady signs of demand returning.
“Worldwide RevPAR has climbed steadily since its low point of down 90 per cent for the month of April, to a decline of 70 per cent for the month of July.
“Worldwide occupancy rates, which bottomed at 11 per cent for the week ended April 11th, have improved each week, reaching nearly 34 per cent for the week ended August 1st.
“Currently, 91 per cent of our worldwide hotels are now open compared to 74 per cent in April, and 96 per cent are open today in North America.”
Rival Accor took a similar tone release its results last week, acknowledging losses, but arguing the worst might have passed.
Marriott said, as of the end of the second quarter, company net liquidity totalled approximately $4.4 billion, representing roughly $2.3 billion in cash and cash equivalents, and $2.9 billion of unused borrowing capacity under its revolving credit facility, less $0.8 billion of commercial paper outstanding.
“Greater China continues to lead the recovery,” continues Sorenson.
“As of early May, all our hotels in the region are open, and occupancy levels are now reaching 60 per cent, compared to 70 per cent the same time last year, and a marked improvement from single-digit levels in February.
“The improvement we have seen in Greater China exemplifies the resilience of travel demand once there is a view that the virus is under control and travel restrictions have eased.
“Our other regions around the world have also experienced steady improvements in demand and RevPAR over the last couple of months, though the pace varies and tends to be slower in regions that depend more on international travellers.”
Marriott said it has a strong pipeline of upcoming hotels, featuring approximately 510,000 rooms, 45 percent of which are under construction.
Sorenson concluded: “While the full recovery from Covid-19 will clearly take time, the current trends we are seeing reinforce our view that when people feel safe traveling, demand returns quickly.”