BETHESDA, MD—Marriott International Inc. has reported second quarter 2020 results. Comparable systemwide constant dollar RevPAR declined 84.4% worldwide, 83.6% in North America and 86.7% outside North America.
Arne M. Sorenson, president/CEO 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% for the month of April, to a decline of 70% for the month of July. Worldwide occupancy rates, which bottomed at 11% for the week ended April 11, have improved each week, reaching nearly 34% for the week ended Aug. 1. Currently, 91% of our worldwide hotels are now open compared to 74% in April, and 96% are open today in North America.”
- Second quarter reported net loss totaled $234 million, compared to reported net income of $232 million in the year-ago quarter. Second quarter adjusted net loss totaled $210 million, compared to second quarter 2019 adjusted net income of $525 million. Second quarter 2020 impairment charges and bad debt expense related to COVID-19 impacted reported and adjusted net loss by $61 million after-tax and $54 million after-tax, respectively.
- Second quarter reported diluted loss per share totaled $0.72, compared to reported diluted EPS of $0.69 in the year-ago quarter. Second quarter adjusted diluted loss per share totaled $0.64, compared to second quarter 2019 adjusted diluted EPS of $1.56. Second quarter 2020 impairment charges and bad debt expense related to COVID-19 impacted reported and adjusted diluted loss per share by $0.19 and $0.17, respectively.
- Adjusted EBITDA totaled $61 million in the 2020 second quarter, compared to second quarter 2019 adjusted EBITDA of $952 million. Second quarter 2020 adjusted EBITDA included $36 million of bad debt expense related to COVID-19.
“Greater China continues to lead the recovery. As of early May, all our hotels in the region are open, and occupancy levels are now reaching 60%, compared to 70% the same time last year, and a marked improvement from single-digit levels in February. While Greater China’s recovery was originally led by demand from leisure travelers, particularly in resorts and drive-to destinations, we are now seeing more widespread business demand, including some group activity.
“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 travelers.
“Over the last few months, we have moved quickly and decisively to mitigate the impact of COVID-19 on our business. We have implemented measures to help our owners manage through the crisis and strengthened our financial position by increasing our liquidity, extending our average debt maturity, and reducing our cash outlays significantly.
“There is still no visibility around when RevPAR could return to 2019 levels. However, the global industry trends experienced over the last couple of months give us confidence that people will continue to increase their travel. We are optimistic that the second quarter will mark the bottom and that the worst is now behind us,” Sorenson said.
Marriott added more than 11,400 rooms globally during the second quarter, including roughly 2,000 rooms converted from competitor brands and approximately 4,700 rooms in international markets. Net rooms grew 4.1% from a year ago.
At quarter-end, Marriott’s worldwide development pipeline totaled nearly 3,000 hotels and approximately 510,000 rooms—45% of which are under construction—including roughly 28,000 rooms approved, but not yet subject to signed contracts. More than 230,000 rooms in the pipeline were under construction as of the end of the second quarter.
“We are gratified to see owners continuing to choose our brands. In the first half of the year, we signed 30% more deals in the Asia-Pacific region than we did in the same period last year. With the restrictions related to the pandemic slowing construction timelines, there is uncertainty surrounding future rooms growth. Given current trends, we estimate rooms could grow by 2-3%, net, for the full year,” Sorenson said.