As the coronavirus pandemic moved throughout the world, Marriott International Inc. reported that revenue per available room (RevPAR) plummeted by 22.5 percent globally. The company also issued senior notes of $1.6 billion in April and brought in $920 million in additional liquidity via amendments to its co-brand credit card agreements in May.
Marriott CEO and President Arne Sorenson said on a Monday (May 11) earnings call that, overall, “negative trends appear to have bottomed in most regions around the world. The resiliency of demand is evident in the improving trends in greater China.” He noted that occupancy levels in the region are currently a bit more than 30 percent, which is higher from the lows of below 10 percent in mid-February.
As some beaches reopened last weekend, Sorenson noted that the Ritz-Carlton Bacara in Santa Barbara and the company’s hotels in Hilton Head, South Carolina were expected to attain roughly 50 percent of occupancy based on reservations on the books. He added that limited-service occupancy in the United States has increased a bit each week over the past few weeks.
Sorenson, however, noted that national, local and state governments are aiming to manage the “tight rope” between the coronavirus and starting their economies again. In April, Sorenson said in a televised interview that that nobody knows when the lodging industry will bounce back from the pandemic’s impacts.
However, Marriott is coming up with new ways to keep customers and hotel workers safe, with the inclusion of social distancing measures, bolstered cleaning and hotel employees wearing masks. Sorenson said at the time per the televised interview, “I’m hopeful those things aren’t permanent, but instead are about communicating through the operating tools that you can be safe in our hotels, whether you work there or are staying there.”
The outbreak, for its part, is crippling the $1.7 trillion tourism industry, which was said in March to be the largest impact for the travel industry in nearly 20 years. According to the UN World Tourism Organization, international tourism made $1.7 trillion in revenue in 2018.
The news comes as individuals have so many more choices for conducting high-quality video calls from their desktops or mobile devices than ever before. Many have discovered that it’s easier and less disruptive to conduct meetings over the phone. The alternative to flying on a plane could be Zoom, Skype or Blue Jeans.
All in, Marriott International reported revenue of $4.7 billion and adjusted diluted earnings per share of 26 cents for the first quarter of 2020. Analysts had forecasted $4.27 billion and 91 cents. The hospitality company’s shares were down approximately 5 percent as of just before 1:30 p.m. Eastern Time.