Marriott International Inc. swung to a loss as travel bans and social-distancing efforts weighed heavily on the company’s second-quarter results.
Marriott reported an adjusted loss per share of 64 cents, worse than the average analyst estimate of 42 cents. It was the first quarterly loss for the company since 2011.
Revenue per available room, or RevPar, declined by 84 per cent, the company said in a statement on Monday. The shares slipped in early trading.
Key Insights
U.S. room demand has ticked up since April as leisure travelers embarked on road trips to regional destinations. Marriott relies more heavily on higher-priced hotel brands than Hilton Worldwide Holdings Inc., leaving it more exposed to corporate travel policies and the whims of airline passengers.
Marriott’s RevPar was still down 70 per cent in July compared with a year earlier, an indication of the long recovery facing the hotel industry. Travel has once taken as coronavirus cases spiked across the U.S.
Marriott said occupancy rates are reaching 60 per cent in its Greater China hotels, compared to 70 per cent at the same time last year. The rebound includes an increase in business travel, demonstrating that people are booking hotels in places where “there is a view that the virus is under control and travel restrictions have eased.”
Marriott raised cash through bond sales and credit card deals during the second quarter to give itself liquidity to ride out the pandemic. Industry executives say a full recovery will take at least two years.
Market Reaction
Marriott fell as much as 3.5 per cent after the results were released. The stock has declined 38 per cent this year.
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